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71.07 Cross-reference Cross-reference: See also s. Tax 2.955, Wis. adm. code.
71.07(8) (8)Personal exemptions credit for natural persons. On income of calendar year 1986 and corresponding fiscal years and thereafter, there may be deducted from the tax after it has been computed according to the rates of this section personal exemptions for natural persons as follows:
71.07(8)(a) (a) An exemption of one of the following amounts if the taxpayer has reached the age of 65 prior to the close of the calendar or fiscal year and if one of the following applies:
71.07(8)(a)1. 1. If the taxpayer is an individual, the taxpayer files an individual return, and has adjusted gross income of less than $30,000 in the year to which the claim relates, $25.
71.07(8)(a)2. 2. If the taxpayer is an individual, the taxpayer files an individual return, and has adjusted gross income of at least $30,000 but less than $31,000 in the year to which the claim relates, the amount obtained by subtracting from $25 2.5 percent of the amount by which the taxpayer's adjusted gross income exceeds $30,000.
71.07(8)(a)3. 3. If the taxpayer is married, the taxpayer files a joint return, and has adjusted gross income of less than $40,000 in the year to which the claim relates, $25.
71.07(8)(a)4. 4. If the taxpayer is married, the taxpayer files a joint return, and has adjusted gross income of at least $40,000 but less than $41,000 in the year to which the claim relates, the amount obtained by subtracting from $25 2.5 percent of the amount by which the taxpayer's adjusted gross income exceeds $40,000.
71.07(8)(a)5. 5. If the taxpayer is married, the taxpayer files a separate return, and has adjusted gross income of less than $20,000 in the year to which the claim relates, $25.
71.07(8)(a)6. 6. If the taxpayer is married, the taxpayer files a separate return and has adjusted gross income of at least $20,000 but less than $21,000 in the year to which the claim relates, the amount obtained by subtracting from $25 2.5 percent of the amount by which the taxpayer's adjusted gross income exceeds $20,000.
71.07(8)(b) (b) An exemption of $50 for each person for whom the taxpayer is entitled to an exemption for the taxable year under section 151 (c) of the federal internal revenue code.
71.07(8)(c) (c) With respect to persons who change their domicile into or from this state during the taxable year and nonresident persons, personal exemptions shall be limited to the fraction of the amount so determined that Wisconsin adjusted gross income is of federal adjusted gross income. In this paragraph, for married persons filing separately “adjusted gross income" means the separate adjusted gross income of each spouse and for married persons filing jointly “adjusted gross income" means the total adjusted gross income of both spouses. If a person and that person's spouse are not both domiciled in this state during the entire taxable year, their personal exemptions on a joint return are determined by multiplying the personal exemption that would be available to each of them if they were both domiciled in this state during the entire taxable year by a fraction the numerator of which is their joint Wisconsin adjusted gross income and the denominator of which is their joint federal adjusted gross income.
71.07(8)(d) (d) No new claim may be filed under this subsection for a taxable year that begins after December 31, 1999.
71.07(8b) (8b)Low-income housing credit.
71.07(8b)(a) (a) Definitions. In this subsection:
71.07(8b)(a)1. 1. “Allocation certificate” means a statement issued by the authority certifying that a qualified development is eligible for a credit under this subsection and specifying the amount of the credit that the owners of the qualified development may claim.
71.07(8b)(a)2. 2. “Authority” means the Wisconsin Housing and Economic Development Authority.
71.07(8b)(a)3. 3. “Claimant” means a person who has an ownership interest in a qualified development and who files a claim under this subsection.
71.07(8b)(a)4. 4. “Compliance period” means the 15-year period beginning with the first taxable year of the credit period.
71.07(8b)(a)5. 5. “Credit period” means the period of 6 taxable years beginning with the taxable year in which a qualified development is placed in service. For purposes of this subdivision, if a qualified development consists of more than one building, the qualified development is placed in service in the taxable year in which the last building of the qualified development is placed in service.
71.07(8b)(a)6. 6. “Qualified basis” means the qualified basis determined under section 42 (c) (1) of the Internal Revenue Code.
71.07(8b)(a)7. 7. “Qualified development” means a qualified low-income housing project under section 42 (g) of the Internal Revenue Code that is financed with tax-exempt bonds, pursuant to section 42 (i) (2) of the Internal Revenue Code, and located in this state.
71.07(8b)(b) (b) Filing claims. Subject to the limitations provided in this subsection and in s. 234.45, for taxable years beginning after December 31, 2017, a claimant may claim as a credit against the taxes imposed under s. 71.02 or 71.08, up to the amount of the tax, the amount allocated to the claimant by the authority under s. 234.45 for each taxable year within the credit period.
71.07(8b)(c) (c) Limitations.
71.07(8b)(c)1.1. No person may claim the credit under par. (b) unless the claimant includes with the claimant's return a copy of the allocation certificate issued to the qualified development.
71.07(8b)(c)2. 2. A partnership, limited liability company, or tax-option corporation may not claim the credit under this subsection. The partners of a partnership, members of a limited liability company, or shareholders in a tax-option corporation may claim the credit under this subsection based on eligible costs incurred by the partnership, limited liability company, or tax-option corporation. The partnership, limited liability company, or tax-option corporation shall calculate the amount of the credit that may be claimed by each partner, member, or shareholder and shall provide that information to the partner, member, or shareholder. For shareholders of a tax-option corporation, the credit may be allocated in proportion to the ownership interest of each shareholder. Credits computed by a partnership or limited liability company may be claimed in proportion to the ownership interests of the partners or members or allocated to partners or members as provided in a written agreement among the partners or members that is entered into no later than the last day of the taxable year of the partnership or limited liability company, for which the credit is claimed. Any partner or member who claims the credit as allocated by a written agreement shall provide a copy of the agreement with the tax return on which the credit is claimed. A person claiming the credit as provided under this subdivision is solely responsible for any tax liability arising from a dispute with the department of revenue related to claiming the credit.
71.07(8b)(d) (d) Recapture.
71.07(8b)(d)1.1. As of the last day of any taxable year during the compliance period, if the amount of the qualified basis of a qualified development with respect to a claimant is less than the amount of the qualified basis as of the last day of the immediately preceding taxable year, the amount of the claimant's tax liability under this subchapter shall be increased by the recapture amount determined by using the method under section 42 (j) of the Internal Revenue Code.
71.07(8b)(d)2. 2. In the event that the recapture of any credit is required in any taxable year, the taxpayer shall include the recaptured proportion of the credit on the return submitted for the taxable year in which the recapture event is identified.
71.07(8b)(e) (e) Administration. Section 71.28 (4) (e) to (h), as it applies to the credit under s. 71.28 (4), applies to the credit under this subsection.
71.07(8r) (8r)Beginning farmer and farm asset owner tax credit.
71.07(8r)(a)(a) Definitions. In this subsection:
71.07(8r)(a)1. 1. “Agricultural assets" means machinery, equipment, facilities, or livestock that is used in farming.
71.07(8r)(a)2. 2. “Beginning farmer" means a person who meets the conditions specified in s. 93.53 (2).
71.07(8r)(a)3. 3. “Claimant" means a beginning farmer who files a claim under this subsection or an established farmer who files a claim under this subsection.
71.07(8r)(a)4. 4. “Educational institution" means the Wisconsin Technical College System, the University of Wisconsin-Extension, the University of Wisconsin-Madison, or any other institution that is approved by the department of agriculture, trade and consumer protection under s. 93.53 (6) (a).
71.07(8r)(a)5. 5. “Established farmer" means a person who meets the conditions specified in s. 93.53 (3).
71.07(8r)(a)6. 6. “Farming" has the meaning given in section 464 (e) (1) of the Internal Revenue Code.
71.07(8r)(a)7. 7. “Financial management program" means a course in farm financial management that is offered by an educational institution.
71.07(8r)(a)8. 8. “Lease amount" is the amount of the cash payment paid by a beginning farmer to an established farmer each year for leasing the established farmer's agricultural assets.
71.07(8r)(b) (b) Filing claims.
71.07(8r)(b)1.1. For taxable years beginning after December 31, 2010, and subject to the limitations provided in this subsection, a beginning farmer may claim as a credit against the tax imposed under s. 71.02 or 71.08, on a one-time basis, the amount paid by the beginning farmer to enroll in a financial management program in the year to which the claim relates. If the allowable amount of the claim exceeds the income taxes otherwise due on the beginning farmer's income, the amount of the claim not used as an offset against those taxes shall be certified by the department of revenue to the department of administration for payment to the claimant by check, share draft, or other draft from the appropriation under s. 20.835 (2) (en).
71.07(8r)(b)2. 2. For taxable years beginning after December 31, 2010, and subject to the limitations provided in this subsection, an established farmer may claim as a credit against the tax imposed under s. 71.02 or 71.08 15 percent of the lease amount received by the established farmer in the year to which the claim relates. If the allowable amount of the claim exceeds the income taxes otherwise due on the established farmer's income, the amount of the claim not used as an offset against those taxes shall be certified by the department of revenue to the department of administration for payment to the claimant by check, share draft, or other draft from the appropriation under s. 20.835 (2) (en).
71.07(8r)(c) (c) Limitations.
71.07(8r)(c)1.1. An established farmer may only claim the credit under this subsection for the first 3 years of any lease of the established farmer's agricultural assets to a beginning farmer.
71.07(8r)(c)2. 2. No credit may be allowed under this subsection unless it is claimed within the time period under s. 71.75 (2).
71.07(8r)(c)3. 3. Along with a claimant's income tax return, a claimant shall submit to the department a certificate of eligibility provided under s. 93.53 (5) (b) or (c).
71.07(8r)(c)4. 4. No credit may be claimed under this subsection by a part-year resident or a nonresident of this state.
71.07(8r)(c)5. 5. The right to file a claim under this subsection is personal to the claimant and does not survive the claimant's death. When a claimant dies after having filed a timely claim the amount thereof shall be disbursed under s. 71.75 (10). The right to file a claim under this subsection may be exercised on behalf of a living claimant by the claimant's legal guardian or attorney-in-fact.
71.07(8r)(c)6. 6. The maximum credit that a beginning farmer may claim under this subsection is $500.
71.07(8r)(c)7. 7. Partnerships, limited liability companies, and tax-option corporations may not claim the credit under this subsection, but the eligibility for, and the amount of, the credit are based on the amounts received by the entities under par. (b) 2. A partnership, limited liability company, or tax-option corporation shall compute the amount of credit that each of its partners, members, or shareholders may claim and shall provide that information to each of them. Partners, members of limited liability companies, and shareholders of tax-option corporations may claim the credit in proportion to their ownership interests.
71.07(8r)(d) (d) Administration.
71.07(8r)(d)1.1. Subsection (9e) (d), to the extent that it applies to the credit under that subsection, applies to the credit under this subsection.
71.07(8r)(d)2. 2. No credit may be claimed under this subsection for taxable years beginning after December 31, 2013.
71.07(9) (9)School property tax credit.
71.07(9)(a) (a) In this subsection:
71.07(9)(a)1. 1. “Claimant" means a natural person who files a claim or on whose behalf a claim is filed under this subsection but does not include an estate, fiduciary or trust.
71.07(9)(a)2. 2. “Principal dwelling" means any dwelling, whether owned or rented, and the land surrounding it that is reasonably necessary for use of the dwelling as a primary dwelling of the claimant and may include a part of a multidwelling or multipurpose building and a part of the land upon which it is built that is used as the claimant's primary dwelling.
71.07(9)(a)3. 3. “Property taxes" means real and personal property taxes, exclusive of special assessments, delinquent interest and charges for service, paid by a claimant on the claimant's principal dwelling during the taxable year for which credit under this subsection is claimed, less any property taxes paid which are properly includable as a trade or business expense under section 162 of the Internal Revenue Code. If the principal dwelling on which the taxes were paid is owned by 2 or more persons or entities as joint tenants or tenants in common or is owned by spouses as marital property, “property taxes" is that part of property taxes paid that reflects the ownership percentage of the claimant. If the principal dwelling is sold during the taxable year the “property taxes" for the seller and buyer shall be the amount of the tax prorated to each in the closing agreement pertaining to the sale or, if not so provided for in the closing agreement, the tax shall be prorated between the seller and buyer in proportion to months of their respective ownership. “Property taxes" includes monthly municipal permit fees in respect to a principal dwelling collected under s. 66.0435 (3) (c).
71.07(9)(a)4. 4. “Rent constituting property taxes" means 25 percent of rent if heat is not included, or 20 percent of rent if heat is included, paid during the taxable year for which credit is claimed under this subsection, at arm's length, for the use of a principal dwelling and contiguous land, excluding any payment for domestic, food, medical or other services which are unrelated to use of the dwelling as housing, less any rent paid that is properly includable as a trade or business expense under the internal revenue code. “Rent" includes space rental paid to a landlord for parking a mobile home or manufactured home. Rent shall be apportioned among the occupants of a principal dwelling according to their respective contribution to the total amount of rent paid. “Rent" does not include rent paid for the use of housing which was exempt from property taxation, except housing for which payments in lieu of taxes were made under s. 66.1201 (22).
71.07(9)(b)1.1. Subject to the limitations under this subsection and except as provided in subds. 2., 4. and 5., a claimant may claim as a credit against, but not to exceed the amount of, taxes under s. 71.02, 10 percent of the first $2,000 of property taxes or rent constituting property taxes, or 10 percent of the first $1,000 of property taxes or rent constituting property taxes of a married person filing separately.
71.07(9)(b)2. 2. Subject to the limitations under this subsection, a claimant may claim as a credit against, but not to exceed the amount of, taxes under s. 71.02, the amounts specified in the proposal under 1997 Wisconsin Act 237, section 9256 (2c).
71.07(9)(b)4. 4. For taxable years beginning after December 31, 1998, and before January 1, 2000, subject to the limitations under this subsection a claimant may claim as a credit against, but not to exceed the amount of, taxes under s. 71.02, 8.4 percent of the first $0 of property taxes or rent constituting property taxes, or 8.4 percent of the first $0 of property taxes or rent constituting property taxes of a married person filing separately.
71.07(9)(b)5. 5. For taxable years beginning after December 31, 1999, subject to the limitations under this subsection a claimant may claim as a credit against, but not to exceed the amount of, taxes under s. 71.02, 12 percent of the first $2,500 of property taxes or rent constituting property taxes, or 12 percent of the first $1,250 of property taxes or rent constituting property taxes of a married person filing separately.
71.07(9)(c) (c) For an unmarried person or a married person filing a separate return who is a part-year resident of this state, the credit under this subsection is limited to that fraction of the amount determined under this subsection that Wisconsin adjusted gross income is of federal adjusted gross income. No credit is allowed under this subsection for unmarried persons or married persons filing separate returns who are nonresidents of this state. If one spouse is not domiciled in this state during the entire taxable year, the credit on a joint return is determined by multiplying the school property tax credit that would be available to them if both spouses were domiciled in this state during the entire taxable year by a fraction the numerator of which is their joint Wisconsin adjusted gross income and the denominator of which is their joint federal adjusted gross income. No credit is allowed under this subsection on a joint return if both spouses are nonresidents of this state.
71.07(9)(d) (d) No credit may be allowed under this subsection unless it is claimed within the period specified in s. 71.75 (2).
71.07(9)(e) (e) In any case in which a principal dwelling is rented by a person from another person under circumstances deemed by the department of revenue to be not at arm's length, the department may determine rent at arm's length, and, for purposes of this subsection, such determination shall be final.
71.07(9)(f) (f) The department of revenue, on its forms and instructions, shall refer to the credit under this subsection as the school property tax credit.
71.07(9e) (9e)Earned income tax credit.
71.07(9e)(a) (a) For taxable years beginning before January 1, 1994, any natural person may credit against the tax imposed under s. 71.02 an amount equal to one of the following percentages of the federal basic earned income credit for which the person is eligible for the taxable year under section 32 (b) (1) (A) to (C) of the internal revenue code:
71.07(9e)(a)1. 1. If the person has one qualifying child who has the same principal place of abode as the person, 5 percent.
71.07(9e)(a)2. 2. If the person has 2 qualifying children who have the same principal place of abode as the person, 25 percent.
71.07(9e)(a)3. 3. If the person has more than 2 qualifying children who have the same principal place of abode as the person, 75 percent.
71.07(9e)(ac) (ac) For taxable years beginning after December 31, 1994, and before January 1, 1996, any natural person may credit against the tax imposed under s. 71.02 an amount equal to one of the following percentages of the federal basic earned income credit for which the person is eligible for the taxable year under section 32 (b) (1) (A) to (C) of the internal revenue code:
71.07(9e)(ac)1. 1. If the person has one qualifying child who has the same principal place of abode as the person, 4 percent.
71.07(9e)(ac)2. 2. If the person has 2 qualifying children who have the same principal place of abode as the person, 16 percent.
71.07(9e)(ac)3. 3. If the person has 3 or more qualifying children who have the same principal place of abode as the person, 50 percent.
71.07(9e)(ad) (ad) For taxable years beginning after December 31, 1993, and before January 1, 1995, a person who has one qualifying child who has the same principal place of abode as the person may credit against the tax imposed under s. 71.02 an amount equal to the amount calculated by one of the following methods, based on the person's earned income or federal adjusted gross income:
71.07(9e)(ad)1. 1. If the person's federal adjusted gross income is below the phase-out income threshold under par. (at) and the person's earned income is the maximum credit income under par. (at) or less, the credit shall be the person's earned income multiplied by 1.15 percent.
71.07(9e)(ad)2. 2. If the person's federal adjusted gross income is below the phase-out income threshold under par. (at) and the person's earned income is more than the maximum credit income under par. (at) but not more than the phase-out income threshold, the credit shall be the maximum credit income multiplied by 1.15 percent.
71.07(9e)(ad)3. 3. If the person's federal adjusted gross income is below the phase-out income threshold under par. (at) and the person's earned income is more than the phase-out income threshold but not more than the maximum income under par. (at), the credit shall be the amount obtained by subtracting from the maximum credit under par. (at), the amount obtained by multiplying by 0.82 percent, the difference between the person's earned income and the phase-out income threshold.
71.07(9e)(ad)4. 4. If the person's federal adjusted gross income is at or above the phase-out income threshold under par. (at) but not more than the maximum income under par. (at), the credit shall be the lesser of one of the following:
71.07(9e)(ad)4.a. a. If the person's earned income is the maximum credit income under par. (at) or less, the person's earned income multiplied by 1.15 percent.
71.07(9e)(ad)4.b. b. If the person's earned income is more than the maximum credit income under par. (at) but not more than the phase-out income threshold under par. (at), the maximum credit income multiplied by 1.15 percent.
71.07(9e)(ad)4.c. c. If the person's earned income is more than the phase-out income threshold under par. (at) but not more than the maximum income under par. (at), the amount obtained by subtracting from the maximum credit under par. (at), the amount obtained by multiplying by 0.82 percent, the difference between the person's earned income and the phase-out income threshold.
71.07(9e)(ad)4.d. d. The amount obtained by subtracting from the maximum credit under par. (at), the amount obtained by multiplying by 0.82 percent, the difference between the person's federal adjusted gross income and the phase-out income threshold under par. (at).
71.07(9e)(af) (af) For taxable years beginning after December 31, 1995, and before January 1, 2011, any natural person may credit against the tax imposed under s. 71.02 an amount equal to one of the following percentages of the federal basic earned income credit for which the person is eligible for the taxable year under section 32 (b) (1) (A) to (C) of the Internal Revenue Code:
71.07(9e)(af)1. 1. If the person has one qualifying child who has the same principal place of abode as the person, 4 percent.
71.07(9e)(af)2. 2. If the person has 2 qualifying children who have the same principal place of abode as the person, 14 percent.
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2017-18 Wisconsin Statutes updated through 2019 Wis. Act 18 and through all Supreme Court and Controlled Substances Board Orders filed before and in effect on October 1, 2019. Published and certified under s. 35.18. Changes effective after October 1, 2019, are designated by NOTES. (Published 10-1-19)