Tax 3.05 NoteExample: Partnership C has two equal partners, Individual D and Individual E. Individual D and Individual E are both Wisconsin residents. For its 2011 taxable year, Partnership C computes $450,000 of ordinary business income for federal income tax purposes and a job creation deduction of $40,000. Partnership C reports the following amounts to both Individual D and Individual E:
Tax 3.05 NoteExample: Company F, a professional employer organization, hires Employee G to perform services in Wisconsin for Taxpayer H, a client of Company F. For purposes of determining the job creation deduction, Employee G is considered to be an employee solely of Taxpayer H.
Tax 3.05 HistoryHistory: EmR1105: emerg. cr. eff. 4-7-11; CR 11-024: cr. Register November 2011 No. 671, eff. 12-1-11; CR 14-005: am. (6) Register August 2014 No. 704, eff. 9-1-14; CR 17-019: am. (3), Register June 2018 No. 750 eff. 7-1-18; correction in (2) (f) made under s. 35.17, Stats., Register December 2024 No. 828. Tax 3.085Tax 3.085 Retirement plan distributions. Tax 3.085(1)(1) Nonresidents. Employee annuity, pension, profit-sharing or stock bonus plan distributions, including self-employed retirement plan distributions, and distributions from qualified deferred compensation plans under ss. 401 (k), 403 (b) and 457 of the internal revenue code received by a person while a nonresident of Wisconsin shall be exempt from the Wisconsin income tax, regardless of whether any of these distributions may be attributable to personal services performed in Wisconsin. Tax 3.085(2)(2) Residents. Employee annuity, pension, profit-sharing or stock bonus plan distributions, including self-employed retirement plan distributions, and distributions from qualified deferred compensation plans under ss. 401 (k), 403 (b) and 457 of the internal revenue code received by a person while a resident of Wisconsin shall be subject to the Wisconsin income tax, regardless of whether any of these distributions may be attributable to personal services performed outside of Wisconsin. Tax 3.085 NoteNote: This section interprets s. 71.04 (1) (a), Stats. Tax 3.085 HistoryHistory: Cr. Register, March, 1978, No. 267, eff. 4-1-78; am. Register, June, 1990, No. 414, eff. 7-1-90. Tax 3.095Tax 3.095 Income tax status of interest and dividends received from government and other securities by individuals and fiduciaries. Tax 3.095(1)(1) Purpose. This section lists federal, state, municipal and other government securities, and certain nongovernment securities, and specifies whether interest and dividends payable on those securities are exempt from or subject to the Wisconsin income tax on individuals and fiduciaries. The lists are not all-inclusive. Tax 3.095 NoteNote: Information regarding the income tax status of interest and dividends received from securities not listed in this section may be obtained by writing to Wisconsin Department of Revenue, Technical Services Staff, P.O. Box 8933, Madison, WI 53708-8933.
Tax 3.095(2)(b)(b) “Federal securities” means only securities which are direct and primary obligations of the United States and securities the interest on which federal law prohibits states from taxing. Federal securities do not include securities for which the United States is merely a guarantor and, therefore, has an obligation which is secondary and contingent to that of the issuer of the security. Tax 3.095(2)(c)(c) “Public housing agency” means any state, county, municipality or other governmental entity or public body, or agency or instrumentality thereof, which is authorized to engage in or assist in the development or operation of lower income housing, under 42 USC 1437a (b) (6). Tax 3.095(2)(d)(d) “WHEDA” means “Wisconsin Housing and Economic Development Authority.” Tax 3.095(2)(e)(e) “WHEFA” means “Wisconsin Health and Educational Facilities Authority.” Tax 3.095(3)(a)(a) Under s. 71.05 (6) (a) 1., Stats., interest income which is subject to the Wisconsin income tax on individuals and fiduciaries, but which is not included in federal adjusted gross income, shall be added to federal adjusted gross income in computing Wisconsin taxable income. Tax 3.095 NoteNote: Section 71.05 (1) (a) 1., 1985 Stats., was amended by 1987 Wis. Act 27, to provide for the addition to federal adjusted gross income, of any interest not included in federal adjusted gross income which is not specifically exempted from state taxation. This change applies only to securities issued after January 28, 1987. Prior to enactment of 1987 Wis. Act 27, the addition applied only to interest excluded from federal adjusted gross income solely by s. 103 of the internal revenue code. Section 71.05 (1) (a) 1., 1985 Stats., was renumbered s. 71.05 (6) (a) 1., Stats., by 1987 Wis. Act 312, effective January 1, 1989. Tax 3.095(3)(b)(b) Under s. 71.05 (6) (b) 1., Stats., interest and dividend income which is included in federal adjusted gross income but which is by federal law exempt from state income taxation, shall be subtracted from federal adjusted gross income in computing Wisconsin taxable income. Tax 3.095(4)(4) Exempt securities. Interest and dividends payable on the following securities shall be exempt from the Wisconsin income tax on individuals and fiduciaries: Tax 3.095(4)(a)(a) State, municipal and other government securities exempt from Wisconsin income tax. Tax 3.095(4)(a)1.1. District of Columbia general obligation bonds issued on or prior to January 28, 1987, where the interest from the bonds qualifies for exemption from federal income taxation for a reason other than or in addition to s. 103 of the internal revenue code. Tax 3.095(4)(a)3.3. Public housing agency bonds issued on or prior to January 28, 1987, by agencies located outside Wisconsin where the interest from the bonds qualifies for exemption from federal income taxation for a reason other than or in addition to s. 103 of the internal revenue code. Tax 3.095(4)(a)6.6. Stripped general obligation bond certificates attributable to certain District of Columbia general obligation bonds issued on or prior to January 28, 1987, where the interest from the bonds qualifies for exemption from federal income taxation under section 1286 of the internal revenue code and D.C. Code Ann. 47-332. Tax 3.095 NoteNote: Stripped general obligation bond certificates meeting the criteria of subd. 6. include Stripped Tax-Exempt Participations, or‘STEPS.’
Tax 3.095(4)(a)7.7. Virgin Island Housing Authority bonds issued on or prior to January 28, 1987, where the interest from the bonds qualifies for exemption from federal income taxation for a reason other than or in addition to section 103 of the internal revenue code. Tax 3.095(4)(a)8.8. WHEDA bonds issued on or prior to January 28, 1987, except business development revenue bonds, economic development revenue bonds and CHAP housing revenue bonds issued by WHEDA. Tax 3.095(4)(a)10.10. WHEDA bonds issued under s. 234.65, Stats., to fund an economic development loan to finance construction, renovation or development of property that would be exempt under s. 70.11 (36), Stats. Tax 3.095(4)(a)12.12. WHEDA bonds or notes issued under s. 234.08 or 234.61, Stats., on or after January 1, 2004, if the bonds or notes are issued to fund multifamily affordable housing projects or elderly housing projects. Tax 3.095(4)(a)18.18. Wisconsin Health and Educational Facilities Authority bonds or notes issued under s. 231.03 (6), Stats., on or after October 27, 2007, if the proceeds from the bonds or notes that are issued are used by a health facility, as defined in s. 231.01 (5), Stats., to fund the acquisition of information technology hardware or software. Tax 3.095(4)(a)19.19. Bonds or notes issued by a commission created under s. 66.0304, Stats., if any of the following applies: Tax 3.095(4)(a)19.a.a. The bonds or notes are used to fund multifamily affordable housing projects or elderly housing projects in this state, and WHEDA has the authority to issue its bonds or notes for the project being funded. Tax 3.095(4)(a)19.b.b. The bonds or notes are used by a health facility, as defined in s. 231.01 (5), Stats., to fund the acquisition of information technology hardware or software, in this state, and the Wisconsin Health and Educational Facilities Authority has the authority to issue its bonds or notes for the project being funded. Tax 3.095(4)(a)19.c.c. The bonds or notes are issued to fund a redevelopment project in this state or a housing project in this state, and the authority exists for bonds or notes to be issued by an entity described under s. 66.1201, 66.1333, or 66.1335, Stats. Tax 3.095(4)(a)20.20. WHEDA bonds or notes, if the bonds or notes are issued to provide loans to a public affairs network under s. 234.75 (4), Stats. Tax 3.095(4)(a)21.21. WHEFA bonds or notes, if the bonds or notes are issued for the benefit of a person who is eligible to receive the proceeds of bonds or notes from another entity for the same purpose for which the bonds or notes are issued and the interest income received from the other bonds or notes is exempt from taxation under subch. I of ch. 71, Stats. Tax 3.095 NoteNote: Under par. (a), interest and dividends payable on certain securities issued on or before January 28, 1987, is exempt from Wisconsin income tax. This is because prior to enactment of 1987 Wis. Act 27, which amended s. 71.05 (1) (a) 1., 1985 Stats., effective with securities issued after January 28, 1987, no modification was provided to add to federal adjusted gross income interest and dividends which were excludable from federal adjusted gross income for any reason other than or in addition to s. 103 of the internal revenue code. Section 71.05 (1) (a) 1., 1985 Stats., was renumbered s. 71.05 (6) (a) 1., Stats., by 1987 Wis. Act 312, effective January 1, 1989. Tax 3.095(4)(b)3.3. Bank repurchase agreements for U.S. Government treasury bills, notes and bonds, if interest is paid by the federal government directly to the taxpayer. Tax 3.095(4)(b)21r.21r. Northern Mariana Islands, 48 USC 1801 and s. 607 (a) of the Covenant to Establish a Commonwealth of the Northern Mariana Islands. Tax 3.095 NoteNote: Proprietary zero-coupon certificates include CATS, TIGRs, Cougars, ETRs, Lions, STARs, Zebras, etc.
