Wisconsin tips tax calculator after the SB 36 veto
Wisconsin came closest of any state to a tips exemption that failed: SB 36 passed both chambers, was vetoed, and the Senate failed to override on May 13, 2026.
What SB 36 would have done
The Legislative Fiscal Bureau describes a subtraction for 2025 through 2028 using the federal definition of qualified tips, capped at $25,000 and phased out between $150,000 and $400,000 of modified AGI ($300,000–$550,000 married). The substitute amendment would have reached non-cash tips and independent contractors such as app-based drivers. With the veto sustained, Wisconsin taxes tips for 2025 and 2026.
Wisconsin figures
| Cash wage / minimum | $2.33 / $7.25 |
|---|---|
| In force | July 1, 2026 |
| Next change | none scheduled |
| Tipped threshold | Not specified |
| Tips on the 2025 return | tips stay taxable in this state. SB 36 would have created a 2025–2028 subtraction for qualified tips; it was vetoed and the veto was sustained on May 13, 2026. Source: Wisconsin Legislature |
| Tips on the 2026 return | tips stay taxable in this state. Same: no Wisconsin tips subtraction is in law. Source: Wisconsin Legislature |
Opportunity employees
Wisconsin requires $2.33 an hour for tipped employees and makes the employer cover any shortfall over the pay period. A tipped “opportunity employee” — under 20 and within the first 90 consecutive days of employment — may be paid $2.13, against a $5.90 opportunity minimum. Wisconsin’s general minimum wage remains $7.25.
A Madison server
$16,500 of tips save $1,870 federally; Wisconsin taxes them. Thirty hours at $2.33 plus $140 of tips leaves $8 owed against $218.
Check a Wisconsin workweek
Where these figures come from
- Wisconsin Department of Revenue · Wisconsin Department of Workforce Development
- 2025 Senate Bill 36 — income tax exemption for cash tips (status: veto sustained May 13, 2026) (2026-05-13)
- Minimum Wages for Tipped Employees (table by state) (2026-07-01)
Federal rules: how the deduction works. Nearby: Michigan, Minnesota, Iowa, Illinois.
Figures verified against primary sources on