Instructions for Form PW-2 

Purpose of Form PW-2 
 
Nonresident owners (partners, members, shareholders, or beneficiaries) use Form PW-2 to request an 
exemption from Wisconsin’s withholding tax on income from pass-through entities. For each taxable 
year of the nonresident owner, a separate Form PW-2 is required, but a nonresident owner may request 
an exemption for multiple pass-through entities on one Form PW-2. 
 
Pass-through entities,  including tax-option (S) corporations, partnerships, limited liability companies 
(LLCs) treated as  tax-option (S) corporations or partnerships,  estates, and trusts,  are required  to 
withhold Wisconsin franchise or income taxes on income distributable to a nonresident owner. Section 
71.775(3)(a)3., Wis. Stats., provides that a pass-through entity is not required to withhold on income 
distributable to a nonresident owner who files an approved Form PW-2 with the department or who 
receives a continuous PW-2 exemption letter from the department. 
 
Who May File Form PW-2? 
 
Any nonresident owner who makes sufficient Wisconsin estimated payments may file Form PW-2. 
Additionally, in certain situations, detailed in the specific instructions that follow, the nonresident owner 
may file Form PW-2 even if no estimated payments are made. 
 
Note:  Most first year filers  are  not  eligible for  the exemption. Also,  a nonresident owner whose 
Wisconsin source income from the pass-through entity is less than $1,000 is automatically exempt from 
withholding and should not file Form PW-2. 
 
Due Date for Form PW-2 
 
The filing deadline for Form PW-2 depends on the type of pass-through entity for which the nonresident 
owner is claiming the exemption. 
 
For tax-option (S) corporations, partnerships, and limited liability companies (LLCs) treated as 
a tax-option (S) corporation or partnership: Form PW-2 must be filed by the last day of the first 
month following the close of the pass-through entity's taxable year for which the nonresident owner is 
requesting the exemption. 
 
Example 1: For a 2022 calendar year tax-option (S) corporation, Form PW-2 is due by January 31, 
2023. 
 
Example 2: For a partnership with a fiscal year from October 1, 2022 to September 30, 2023, Form PW-
2 is due by October 31, 2023. 
 
For estates and trusts: Form PW-2 must be filed by the last day of the second month following the 
close of the pass-through entity's taxable year for which the nonresident beneficiary is requesting the 
exemption. 
 
Example 1: For a 2022 calendar year trust, Form PW-2 is due by February 28, 2023. 
 
Example 2: For an estate with a fiscal year from October 1, 2022 to September 30, 2023, Form PW-2 
is due by November 30, 2023. 
 
Note: If the due date falls on a weekend or holiday, the due date becomes the business day immediately 
following the weekend or holiday. 

IC-005a (R. 10-22) 
 

                                   PW-2 Instructions 
 
Caution: Department Approval Required 
 
The exemption from withholding on Form PW-2 must be approved by the department in order to be 
valid. Approvals depend on items such as: filing history, adequate payments, estimated withholding, 
and delinquencies. After the nonresident owner files Form PW-2 with the department, the department 
will notify the  nonresident  owner whether or not  the withholding exemption is approved within 
approximately 30 days. The department will mail the approved withholding exemption letter or the denial 
letter to the nonresident owner. The department’s determination may not be appealed. 
 
The nonresident  owner is responsible for notifying the pass-through  entity when an exemption is 
approved, and a pass-through entity is required to withhold until it receives the approved Form PW-2 
from the owner. 
 
Instructions 
 
At the top right corner of Form PW-2, enter the nonresident owner's taxable year of the exemption 
request. 
 
Example 1: A nonresident shareholder files a calendar year 2022 tax return, but the tax-option (S) 
corporation for which the shareholder is requesting the exemption files a 2021 Form 5S with a fiscal 
year of July 1, 2021 through June 30, 2022. The nonresident shareholder must enter "22" in the space 
provided.  If the department approves  the  request, the tax-option (S)  corporation  is  not  required  to 
withhold on the shareholder's share of income from the 2021 Form 5S with a fiscal year of July 1, 2021 
through June 30, 2022. 
 
Example 2: A nonresident shareholder files a 2022 tax return with a fiscal year of September 1, 2022 
through August 31, 2023, but the tax-option (S) corporation for which the shareholder is requesting the 
exemption files a 2021 Form 5S with a fiscal year of October 1, 2021 through September 30, 2022. The 
nonresident shareholder must enter "22" in the space provided. If the department approves the request, 
the tax-option (S) corporation is not required to withhold on the shareholder's share of income from the 
2021 Form 5S with a fiscal year of October 1, 2021 through September 30, 2022. 
 
Instructions for Part 1 
 
Information about Nonresident Owner Requesting Exemption You (nonresident owner) must enter 
your information in Part 1. 
 
Name.  Individuals,  enter your  name in the order requested (last name, first  name,  middle initial). 
Estates, enter the decedent's name in the order requested (last name, first name, middle initial). All 
other owners such as tax-option (S) corporations, partnerships, and trusts, enter your full legal name. 
 
Nonresident owner's social security number (SSN) or federal employer identification number 
(FEIN). Individuals, enter your complete SSN. Estates, enter the decedent's complete SSN and the 
estate's complete FEIN. Disregarded entities including grantor trusts that do not have an FEIN, enter 
your owner's complete FEIN/SSN. All other owners, enter your complete FEIN. 
 
Address, city, state, and zip code. Enter your complete address. Include your apartment number, if 
any, in the address box. 
 
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                                      PW-2 Instructions 
 
Last  day  of  owner's  taxable  year.  Enter  the  ending  date  of  your  taxable  year.  For  example,  an 
individual nonresident owner filing a 2022 calendar year tax return enters "December 31, 2022". 
 
Type of taxpayer. Check the appropriate box to indicate what type of taxpayer you are. If you are a 
disregarded entity, you must provide the name and SSN/FEIN of your owner. If you check the "Other" 
box, describe the type of entity you are in the space provided. 
 
Form used to report your Wisconsin source income. Check the appropriate box to indicate what 
form will be used to report your Wisconsin source income. A description of each form is given below. 
 
 •     Form 1NPR: Income tax return for nonresident individuals 
 •     Form 2: Income tax return for estates and trusts 
 •     Form 3: Partnership income tax return 
 •     Form 4: Non-Combined corporation franchise or income tax return 
 •     Form 4T: Exempt organization business franchise or income tax return 
 •     Form 5S: Tax-option (S) corporation franchise or income tax return 
 •     Form 6: Combined corporation franchise or income tax return 
 
Caution: The department will not approve Form PW-2 on behalf of individuals who file on a composite 
return (Form 1CNS or Form 1CNP). 
 
If you are a grantor trust, a member of a combined return, or a disregarded entity, you must provide the 
name and SSN/FEIN of the taxpayer reporting the income. 
 
Example 1 
Facts: 
 •     John Doe Trust (nonresident owner of ABC Partnership) is a grantor trust filing Form PW-2 to 
       request an exemption for ABC Partnership 
 •     John Doe is the grantor of the John Doe Trust 
 •     John Doe reports the income from ABC Partnership on their individual income tax return (Form 
       1NPR) 
After John Doe Trust enters its name, FEIN, address, and last day of its taxable year, it must: 
 •     Check the "Estate or Trust" box 
 •     Check the "Form 1NPR" box and enter the name and SSN of John Doe in the space provided 

Example 2 
Facts: 
 •     DEF, LLC (nonresident owner of ABC Partnership) is filing Form PW-2 to request an exemption 
       for ABC Partnership 
 •     DEF, LLC is a disregarded entity for income tax purposes and owned by MNO Corporation 
 •     MNO Corporation reports the income from ABC Partnership on Form 4 

                                             3 
 

                                    PW-2 Instructions 
 
After DEF, LLC enters its name, FEIN, address, and last day of its taxable year, it must: 
 •     Check the "Disregarded Entity" box and enter the name and FEIN of MNO Corporation in the 
       space provided 
 •     Check the "Form 4" box and enter the name and FEIN of MNO Corporation in the space provided 

Example 3 
Facts: 
 •     XYZ, LLC (nonresident owner of ABC Partnership) is filing Form PW-2 to request an exemption 
       for ABC Partnership 
 •     XYZ, LLC is a disregarded entity for income tax purposes and owned by JKL Corporation 
 •     JKL Corporation is a member of a combined return (Form 6) which is filed by GHI Corporation 
After XYZ, LLC enters its name, FEIN, address, and last day of its taxable year, it must: 
 •     Check the "Disregarded Entity" box and enter the name and FEIN of JKL Corporation in the 
       space provided 
 •     Check the "Form 6" box and enter the name and FEIN of GHI Corporation in the space provided 
 
Instructions for Part 2 
 
In the space provided, you (nonresident owner) must enter your full legal name. 
 
Third Party Designee If you want to allow a tax preparer or tax preparation firm, or any other person 
you choose to discuss your Form PW-2 with the department, check “Yes” in the “Third Party Designee” 
area of your return. Also, fill in the designee’s name, phone number, and any five digits the designee 
chooses as their personal identification number (PIN). If you check “Yes,” you are: 
 
 •     Authorizing the department to discuss with the designee any questions that may arise during 
       the processing of your Form PW-2 return. 
 •     Authorizing the designee to: 
       o  Give the department any information missing from your Form PW-2 return. 
       o  Call the department for information about the processing or status of your Form PW-2 
          return. 
 •     Not authorizing the designee to receive any refund check, bind you to anything (including any 
       additional tax liability), or otherwise represent you before the department. 
 
The designee's authorization will automatically  end  no later  than the due date (without regard to 
extensions) for filing your tax return for the next taxable year. If you want to expand the designee’s 
authorization, you must submit Form A-222 (Power of Attorney). 
 
You must also sign and date Form PW-2. Include your title (if applicable) in the space provided. Some 
examples are shown below. 
 
 •     If the nonresident owner is an individual, the individual must sign the return, but the title is not 
       applicable. 

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                                   PW-2 Instructions 
 
 •    If the nonresident owner is a partnership, a general partner must sign the return and enter 
      "general partner" in the space provided. 
 •    If the nonresident owner is a corporation, an officer of the corporation must sign the return and 
      enter their title (president, treasurer, etc.) in the space provided. 
 •    If the nonresident owner is an estate, the personal representative or special administrator must 
      sign  the return and  enter "personal representative" or "special  administrator" in  the space 
      provided. 
 •    If the nonresident owner is a trust, the trustee must sign the return and enter "trustee" in the 
      space provided. 
 
Instructions for Part 3 
 
You (nonresident  owner) must  enter the  information  for  the  pass-through  entity for which  you  are 
requesting the withholding exemption. Instructions for specific fields in this section are given below. 
 
If you are requesting a pass-through withholding exemption for more than one pass-through entity, 
complete a separate Part 3, Part 4, and Part 5 for each pass-through entity and include it with the Form 
PW-2. 
 
Enter the total number of pass-through entities for which you are requesting an exemption in the space 
provided. Include this number in each Part 3 you file. 
 
Name. Enter the full legal name of the pass-through entity for which you are requesting the exemption. 
 
Pass-through entity's FEIN or SSN. Enter the pass-through entity’s complete FEIN. If the entity is an 
estate, enter the complete SSN of the decedent. 
 
Address, city, state, and zip code. Enter the pass-through entity's complete address. 
 
Pass-through entity's last day of taxable year. Enter the ending date of the pass-through entity’s 
taxable year for which you will be reporting income from the pass-through entity on your Wisconsin 
income or franchise tax return. 
 
For example, a nonresident shareholder files a calendar year 2022 tax return, but the tax-option (S) 
corporation for which the shareholder is requesting the exemption has a fiscal year of July 1, 2021 
through June 30, 2022. The nonresident shareholder must enter "June 30, 2022". 
 
Type of pass-through entity. Check the appropriate box to indicate the type of pass-through entity. 
For example, if the pass-through entity is an LLC that is taxed as a tax-option (S) corporation, check 
the "Tax-Option (S) Corporation" box. 
 
Instructions for Part 4 
 
You (nonresident owner) must enter the amount of Wisconsin income and credits you expect to be 
allocated to you from the pass-through entity provided in Part 3 for your taxable year. If you do not know 
what these amounts are, determine a reasonable estimate. You may wish to contact the pass-through 
entity to assist in determining these amounts. 
 
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                                 PW-2 Instructions 
 
Caution: If your Wisconsin source income from the pass-through entity is less than $1,000, do not file 
Form PW-2 because the pass-through entity is already exempt from withholding on your behalf. 
 
Instructions for Part 5 
 
Reason(s) for Exemption You (nonresident owner) must check all boxes that apply to you. 
 
 • Box 1: Check this box if you made estimated payments for your taxable year (or applied an 
   overpayment from the prior tax year). 
    
   Enter the total amount of these payments as of the date of filing Form PW-2 in the space 
   provided. 
    
   Caution:  If your estimated payments were  not  sufficient to  cover the income  that will be 
   allocated to you from the pass-through entity (after accounting for credits from the pass-through 
   entity), include an explanation of the reason why you believe these estimated payments are 
   sufficient. For example, you may have a loss from another activity that partially offsets your 
   income from the pass-through entity. 
    
 • Box 2:  Check this  box if you  have a Wisconsin source net operating or business loss 
   carryforward which exceeds the amount of Wisconsin income that will be allocated to you from 
   the pass-through entity. Enter the amount of your Wisconsin source net operating or business 
   loss carryforward in the space provided. 
    
   Caution: Do not check this box unless you have filed Wisconsin income or franchise tax returns 
   for each year of losses that produced the loss carryforward. 
    
 • Box 3: Check this box if you have Wisconsin credits or credit carryforwards from other activities 
   in the current taxable year which exceed the tax (before  credits) attributable  to your total 
   Wisconsin income from the pass-through entity. 
    
   Enter  the name and amount of your Wisconsin credit in the space provided. If the credit is 
   coming from a pass-through entity, enter the SSN or FEIN of the pass-through entity. 
    
   If you have more than one credit, include a schedule detailing the name, amount, and source 
   (SSN or FEIN) of each credit. 
    
 • Box 4:  Check this box if you  are  a pass-through entity and have withheld taxes on your 
   Wisconsin income (including income passed through to you from a lower-tier entity) allocable to 
   your nonresident owners unless an exemption applies. 
    
 • Box 5: Check this box for any other reason you believe an exemption should be allowed. Provide 
   a detailed explanation to support your reason. 
 
How to Submit Form PW-2 
 
Form PW-2 must be filed electronically through My Tax Account, unless a waiver is approved by the 
department. If a waiver is approved by the department, you may file Form PW-2 by fax or mail. If you 

                                               6 
 

                                   PW-2 Instructions 
 
will be using a fax, use the fax cover sheet on the last page of these instructions. If you will be mailing 
Form PW-2, mail to: 
 
Wisconsin Department of Revenue 
PO Box 8906 
Madison, WI 53708-8906 
 
Approval by Department of Revenue 
 
The department will not approve an exemption from withholding under the following conditions (this list 
is not all-inclusive): 
 
 • The form is not filled out completely. 
 • The  information  provided  for  the  reason(s)  for  exemption does not  match  the  department’s 
   records. 
 • Insufficient estimated payments. 
 
The department will mail an approval or denial letter within approximately 30 days of the date the Form 
PW-2 is received. If approved, present the letter to the pass-through entity for which you are claiming 
the withholding exemption. The pass-through entity must keep a copy of the letter in its records to 
substantiate the exemption. 
 
Customer Assistance 
 
If you have questions regarding how to complete this form, you may: 
 
 • Email your question to the department at DORAuditPassThrough@wisconsin.gov  
 • Contact the department at (608) 264-4229 (Telephone help is also  available  using  TTY 
   equipment. Call the Wisconsin Telecommunications Relay System at 711 or, if no answer, (800) 
   947-3529. These numbers are to be used only when calling with TTY equipment.) 
 • Write to the Wisconsin Department of Revenue, PO Box 8906, Madison WI 53708-8906. 
 
                                   Applicable Laws and Rules 

 This document provides statements or interpretations of the following laws and regulations enacted as 
 of October 25, 2022: sec. 71.775, Wis. Stats. 

                                               7 
 

      PW-2 Instructions 
 
   Form PW-2 Fax Cover Sheet 
 
  To: Wisconsin Department of Revenue 

      PTE Unit A/C 

      Fax (608) 267-0834 

  From:  __________________________________ 

      __________________________________ 

      __________________________________ 

  Sender's Phone Number: (      )                                          _ 

  Number of Pages Submitted (Including Cover Sheet): ____ 

      Confidential Information 
This facsimile transmission contains information which may be confidential or legally privileged. These 
documents are intended only for the use of the Wisconsin Department of Revenue. If you or your firm 
are not the intended recipient and have received this information in error, you are notified that reading, 
occupying, disclosing, or distributing these documents, or taking any action based on the information 
contained  in  them,  is  strictly  prohibited.  These  documents  should  be  returned  to  the  Wisconsin 
Department of Revenue as soon as possible. Notify the Department of Revenue at (608) 266-3680 so 
that we can arrange to retrieve the transmitted documents at no cost to you. 
 
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