Tax 14.01 HistoryHistory: Cr. Register, February, 1990, No. 410, eff. 3-1-90; am. (3) (a), Register, January, 1991, No. 421, eff. 2-1-91; am. (1), (2) (intro.), (3) (a), (4), (5) (b), (6) and (8), renum. (2) (a) to (d) to be (2) (b), (c) (d) and (a), and am. (a) and (b), renum. (5) (a) to be (5) (a) (intro.) and am., renum. (7) to be (7) (a) (intro.) and am., cr. (5) (a) 1., 2., (7) (a) 1. to 4. and (b), Register, July, 2000, No. 535, eff. 8-1-00; CR 16-046: am. (4) (a) to (c) Register January 2018 No. 745, eff. 2-1-18; CR 19-141: cr. (2) (am) Register September 2020 No. 777, eff. 10-1-20; CR 21-085: am. (5) (a) 2. (Example), (b) (Example), (7) (b) (Example) Register August 2022 No. 800, 9-1-22. Tax 14.02(1)(1) Purpose. This section clarifies the requirements to qualify for the Wisconsin homestead credit. Tax 14.02(2)(2) Two members of a household meeting qualifications. Tax 14.02(2)(a)(a) Under s. 71.53 (1) (c), Stats., only one member of a household existing at the end of a calendar year may claim a homestead credit for that year. Thus, if a husband and wife reside in one homestead at the end of a calendar year and both qualify for the homestead credit, only one of them may claim the credit. Tax 14.02(2)(b)(b) Section 71.52 (1), Stats., provides: “. . .When 2 individuals of a household are able to meet the qualifications for a claimant, they may determine between them as to who the claimant is. If they are unable to agree, the matter shall be referred to the secretary of revenue and the secretary’s decision is final.” Tax 14.02 NoteNote: Requests for a determination under par. (b) should be addressed to Wisconsin Department of Revenue, P.O. Box 8906, Madison, WI 53708-8906.
Tax 14.02(3)(3) More than one household in a homestead. Under s. 71.53 (1) (c), Stats., one claimant from each household may claim a homestead credit whether the household is the sole occupant of a homestead or whether several households share the homestead. Tax 14.02(4)(4) Household occupying more than one homestead in a year. Section 71.52 (7), Stats., provides “. . .If a household owns and occupies 2 or more homesteads in the same calendar year, property taxes accrued is the sum of the prorated property taxes accrued attributable to the household for each of such homesteads. If the household owns and occupies the homestead for part of the calendar year and rents a homestead for part of the calendar year, it may include both the proration of taxes on the homestead owned and rent constituting property taxes accrued with respect to the months the homestead is rented in computing the amount of the claim . . .” Thus, if a household owns and occupies a homestead in Wisconsin for a portion of the year and then establishes a homestead in a rented dwelling in Wisconsin for the remainder of the calendar year, property taxes accrued shall be the prorated portion of property taxes attributable to the months the household resided in the owned homestead and rent constituting property taxes accrued shall be 25% of the gross rent paid for the remainder of the year, or 20% if heat was included in the cost of the rent. Tax 14.02 NoteExample: A household owns and occupies a homestead in Wisconsin from January 1 to April 30, and then establishes a homestead in a rented dwelling in Wisconsin with no heat furnished for the remainder of the calendar year. The annual property taxes accrued on the owned homestead equaled $1,800 and gross rent paid for the last 8 months of the year totaled $2,800.
Tax 14.02 NoteThe property taxes and rent allowable for homestead credit purposes equals $1,300, consisting of four-twelfths of the $1,800 of property taxes accrued, or $600, plus 25% of the gross rent of $2,800, or $700 of rent constituting property taxes accrued.
Tax 14.02(5)(5) Household occupying more than one dwelling at the same time. Under s. 71.52 (2), Stats., “gross rent” is rental paid for the right of occupancy of a homestead, and under s. 71.52 (7), Stats., “property taxes accrued” are property taxes levied on the homestead of a household. Since a homestead is the principal dwelling of a household, if a household pays gross rent or property taxes accrued on 2 dwellings occupied concurrently by the household, a claimant may claim only the rent or property taxes pertaining to the principal dwelling. Tax 14.02 NoteExamples: Examples of 2 dwellings occupied concurrently include:
Tax 14.02 Note1) A claimant maintains a permanent homestead and lives part of the year at a summer cottage which he or she owns.
Tax 14.02 Note2) A claimant moves from one apartment to another and pays rent for both apartments for a two-month period.
Tax 14.02(6)(6) Temporary absence from homestead. A claimant who is temporarily absent from a homestead and who does not establish a homestead elsewhere is considered to reside in the homestead for the period of the temporary absence. Tax 14.02 NoteExamples: 1) A person is in the hospital at the end of the calendar year and it is expected that the absence is temporary. The person is considered to reside in the homestead from which the person is temporarily absent.
Tax 14.02 Note2) A person seasonally employed away from the homestead is treated similarly as in example 1.
Tax 14.02(7)(7) Domicile of armed forces member. A member of the United States armed forces stationed outside Wisconsin who retains a Wisconsin domicile and maintains a Wisconsin homestead shall be eligible for a homestead credit if otherwise qualified, even though the member does not occupy the homestead during the year to which the claim relates or at the time of filing the claim. The absence from the Wisconsin homestead is considered to be a temporary absence. Tax 14.02(8)(8) Citizens of other countries. Under s. 71.52 (1), Stats., a citizen of a country other than the United States is not eligible for a homestead credit unless the person is a resident alien for federal tax purposes who does not intend to return to his or her homeland. Tax 14.02 NoteExample: A citizen of another country is in the United States for educational purposes and is required to leave the United States when the educational program is completed. This person is not eligible for a homestead credit.
Tax 14.02(9)(9) Person claiming a farmland preservation credit. Under s. 71.58 (1) (b), Stats., a person is not eligible for a homestead credit if the person qualifies for and claims a farmland preservation credit for the same year to which a homestead credit claim relates. However, if a person who has claimed a farmland preservation credit withdraws the claim, the person is no longer ineligible to receive a homestead credit because of the filing of a farmland preservation credit claim. Withdrawal of the farmland preservation credit claim shall be in writing. A homestead credit claim filed after the withdrawal of a farmland preservation credit claim shall be filed by the normal deadline for filing a homestead credit claim or the department shall disallow the claim. Tax 14.02 NoteExample: A 2017 homestead credit claim filed after the withdrawal of a 2017 farmland preservation credit claim must be filed on or before April 15, 2022.
Tax 14.02 NoteNote: A written withdrawal of a farmland preservation credit claim should be mailed to Wisconsin Department of Revenue, P.O. Box 8906, Madison, WI 53708-8906.
Tax 14.02(10)(10) Person claimed as a dependent. Under s. 71.53 (2) (d), Stats., a person does not qualify for a homestead credit if the person is claimed as a dependent for federal income tax purposes during the year to which the claim relates, unless the person claiming a homestead credit is 62 years of age or older as of December 31 of the claim year. However, a person is not disqualified if any of the following apply: Tax 14.02(10)(a)(a) The person is improperly claimed as a dependent on a federal income tax return. Tax 14.02(10)(b)(b) The person qualifies to be claimed as a dependent on a federal income tax return but is not claimed. Tax 14.02(10)(c)(c) The person is properly claimed as a dependent on a federal income tax return but on a later amended federal income tax return is not claimed. Tax 14.02(11)(11) Deceased claimant. Under s. 71.53 (1) (b), Stats., a person must be alive at the time a homestead credit claim is filed. A claim completed and signed but not filed until after a person’s death shall be denied. Tax 14.02 NoteNote: The qualification for a homestead credit of a person who becomes married or divorced during a claim year or occupies a separate dwelling from his or her spouse for any part of a claim year is described in s. Tax 14.06. Tax 14.02 HistoryHistory: Cr. Register, February, 1990, No. 410, eff. 3-1-90; r. (2) (c) and am. (5), (9), (10) and (11), Register, July, 2000, No. 535, eff. 8-1-00; CR 21-085: am. (9) (Example) Register August 2022 No. 800, eff. 9-1-22. Tax 14.03Tax 14.03 Household income and income. Tax 14.03(1)(1) Purpose. This section clarifies the meaning of“household income” and “income” includable in household income as the terms apply to homestead credit claims. Tax 14.03(3)(a)(a) Under s. 71.52 (5), Stats., a deduction of $500 is allowed for each of the claimant’s dependents, as defined in s. 152 of the Internal Revenue Code, who have the same principal abode as the claimant for more than 6 months during the calendar year to which a claim for homestead credit relates. A claimant may multiply the number of dependents with the same principal abode for more than 6 months by $500 and subtract the result from the total of the income items to arrive at household income. Tax 14.03 NoteExample: A claimant and the claimant’s spouse claim 3 dependents on their 2014 federal income tax return, and all 3 dependents have the same principal abode as the claimant for the entire year. Household income items include Wisconsin adjusted gross income of $10,500, depreciation of $1,500 and unemployment insurance of $500.
Tax 14.03 NoteTotal household income is $11,000, consisting of the total of the income items listed, $12,500, minus the dependent deduction of $1,500, which is $500 multiplied by 3 dependents.
Tax 14.03(3)(b)(b) A dependent is considered to have the same principal abode as the claimant during temporary absences from the claimant’s homestead for reasons such as school attendance, illness, vacations, business commitments or military service. Tax 14.03(3)(c)(c) In the following situations, a dependent who does not have the same principal abode as the claimant for more than 6 months during the calendar year to which a claim for homestead credit relates is nonetheless considered to have the same principal abode for more than 6 months if during that year: Tax 14.03(3)(c)1.1. The dependent is born or dies, and the dependent has the same principal abode as the claimant during the entire time the dependent is alive during that year. Tax 14.03(3)(c)2.2. The dependent is adopted by the claimant, is placed with the claimant for adoption or becomes the stepchild of the claimant, and the dependent has the same principal abode as the claimant from that time to the end of that calendar year. Tax 14.03(4)(a)(a) “Wisconsin adjusted gross income” as defined in s. 71.01 (13), Stats., for the calendar year to which a claim for homestead credit relates. Tax 14.03(4)(b)(b) The following amounts to the extent not included in Wisconsin adjusted gross income: Tax 14.03(4)(b)1.1. Maintenance payments, not including foster care maintenance and supplemental payments excludable under s. 131 of the internal revenue code. Tax 14.03(4)(b)2.2. Court-ordered support payments, including support for dependents under ch. 49, Stats. Tax 14.03(4)(b)3.3. Cash public assistance and county relief, including the following: Tax 14.03(4)(b)3.c.c. Non-legally responsible relative, or “NLRR” AFDC payments or kinship care payments under s. 48.57, Stats. These are payments received as a relative other than a parent, for caring for a dependent child in the claimant’s homestead. Tax 14.03(4)(b)3.e.e. Reimbursement from a governmental agency for amounts originally paid for by the recipient, not including cash reimbursements for home energy assistance or for services under Title XX of the federal social security act and community options program, or “COP” payments under s. 46.27, 2017 Stats. Tax 14.03(4)(b)3.f.f. Adoption assistance payments under Title IV-E of the federal social security act or from another state, or payments by the Wisconsin department of children and families under s. 48.975, Stats., to adoptive parents of children having special needs as described in s. DCF 50.03 (1) (b). Tax 14.03(4)(b)3.g.g. Veterans administration payments for reimbursement of services purchased by the recipient. Tax 14.03 NoteExample: Gross amount of a pension. A claimant was entitled to a pension of $8,000 during the year but received only $5,600 after $2,400 was withheld by the payor for payment of health insurance premiums for the claimant. Of the $8,000 pension, $2,000 was a return of the claimant’s contribution.
Tax 14.03 NoteThe gross pension of $8,000 must be included in income.
Tax 14.03(4)(b)5.5. Except as provided in subd. 3. e., all payments received for the benefit of a claimant or a member of the claimant’s household under the federal social security act, including: Tax 14.03(4)(b)5.a.a. All federal social security retirement, disability or survivorship benefits. Tax 14.03(4)(b)5.c.c. Medicare premiums deducted from social security benefits received by all members of a household. Tax 14.03(4)(b)5.d.d. Supplemental security income, or “SSI” benefits received by persons over 65 years of age, or blind or disabled. Tax 14.03(4)(b)6.6. Compensation and other cash benefits received from the United States for past or present service in the armed forces. Tax 14.03(4)(b)7.7. Payments made to surviving widows, widowers or parents of veterans by the United States, but not including insurance proceeds received by beneficiaries of National Service Life Insurance. Tax 14.03(4)(b)8.8. Proceeds from a personal endowment insurance policy or annuity contract purchased by the recipient. Tax 14.03(4)(b)10.10. Nontaxable interest received from the federal government or any of its instrumentalities, or from state or municipal bonds. Tax 14.03(4)(b)11.11. Scholarship and fellowship gifts or income and other educational grants, not including student loans. Tax 14.03(4)(b)12.12. Unemployment insurance, including railroad unemployment compensation. Tax 14.03(4)(b)14.14. Capital gains not included in Wisconsin adjusted gross income, but not including a nonrecognized gain from an involuntary conversion under s. 1033 of the internal revenue code. Tax 14.03(4)(b)15.15. A gain on the sale of a personal residence excluded under s. 121 of the internal revenue code. A gain on the sale of a personal residence which would be reportable under the installment sale method if taxable may be reported either in full in the year of sale or each year as payments are received. Tax 14.03(4)(b)17.17. Income of a nonresident or part-year resident married to a full-year resident of Wisconsin.
