Updated October 5, 2026. Quick answer: Yes. Wisconsin starts from federal adjusted gross income, and the Department of Revenue says “Wisconsin individual income tax rates vary from 3.50% to 7.65%,” depending on marital status and income. Interest on U.S. government bonds is subtracted, and interest on other states’ bonds is added back.
How Wisconsin treats dividends and interest
| Item | What the documents say |
|---|---|
| Treatment | Taxed on the graduated schedule |
| 2025 rates (single) | 3.50% to $14,680, then 4.4% to $50,480, 5.3% to $323,290 and 7.65% above that |
| Starting point | Form 1 begins with federal adjusted gross income, entered from line 11 of the federal return |
| U.S. obligations | Schedule SB line 2 subtracts interest on U.S. bonds and on certain U.S. government corporations; the instructions say of it, “This income is not taxable.” |
| Ginnie Mae | “You must include interest from these securities in your Wisconsin taxable income.” |
| Other states’ bonds | Statute 71.05(6)(a)1 adds back interest “less related expenses, which is not included in federal adjusted gross income”, with listed exceptions |
| Federal exemptions | The statute subtracts “interest or dividend income which is by federal law exempt from taxation” |
A $20,000 example
Taxable dividends and interest of $20,000 that fall in the 5.3% bracket add $20,000 x 5.3% = $1,060. A lower bracket applies to income below $50,480 for a single filer.
What changes in 2026
The latest documents read print no 2026 change to the way dividends and interest are taxed.
Federal rules
The state’s treatment sits on top of the federal one. Qualified dividends and ordinary dividends are sorted out on the Form 1099-DIV, as the site explains in Box 1a and 1b: ordinary versus qualified dividends, and interest is reported as covered in 1099-INT Box 1. The IRS explains the federal side in Topic no. 403, Interest Received and Topic no. 404, Dividends.
Related: whether Wisconsin taxes capital gains, whether Wisconsin taxes pensions, how Wisconsin taxes retirement income, dividends and interest tax by state, and how tax-exempt interest is reported.
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Answer againSources
- Tax Rates (Wisconsin Department of Revenue): https://www.revenue.wi.gov/Pages/FAQS/pcs-taxrates.aspx
- 2025 Schedule SB Instructions: https://www.revenue.wi.gov/TaxForms2025/2025-ScheduleSB-Inst.pdf
- Wis. Stat. 71.05 Income computation (exempt income, additions): https://docs.legis.wisconsin.gov/statutes/statutes/71/i/05
- Wis. Stat. 71.05(6)(b) Subtractions: https://docs.legis.wisconsin.gov/statutes/statutes/71/i/05/6/b
- 2025 Form 1 Instructions: https://www.revenue.wi.gov/TaxForms2025/2025-Form1-Inst.pdf
Sources: the primary documents linked above, read on October 5, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.