Chapter 71

71.10(5s)(a) (a) For taxable years beginning after December 31, 2011, individuals may not have the option of making a designation to more than 10 individual income checkoffs and the department may not place more than 10 checkoffs on the income tax form. If a checkoff is created for taxable years beginning after December 31, 2011, and before January 1, 2015, the department may not place it on the form, and no designations may be made to the checkoff, for a taxable year that begins before January 1, 2015, except that this limitation does not apply to a checkoff created in a bill that is introduced in both houses of the legislature before June 1, 2011. The limitations in this paragraph do not apply to the checkoff under sub. (5fm).

71.10(5s)(b) (b) For taxable years beginning after December 31, 2011, there may be no individual income tax checkoffs of a temporary nature other than the checkoff under sub. (5fm).

71.10(5s)(c) (c) Beginning in September 2014, based on the amounts certified by the secretary of revenue in August or September 2013, and 2014, as specified in subs. (5) (h), (5e) (h), (5f) (h), (5g) (h), (5h) (h), (5i) (h), (5j) (h), (5k) (h), (5km) (h), and (5m) (h), and for every 2-year period thereafter, the secretary of revenue shall rank the checkoffs based on the total amount of designations received for each checkoff for each 2-year period. For each 2-year period, beginning with 2014, the secretary of revenue shall rank every checkoff that is created under this section.

71.10(5s)(d) (d)

71.10(5s)(d)1. 1. If more than 11 checkoffs exist under this section after August 14, 2014, and every 2 years thereafter, not including the checkoff under sub. (5fm), only the 8 highest ranking checkoffs for which designations were made in the previous 2-year period may appear on the income tax form for the next 2 taxable years.

71.10(5s)(d)2. 2. The remaining 2 checkoffs for which designations may be made and which shall be placed on the income tax form for the next 2 taxable years, in place of the 2 lowest ranking checkoffs, shall be checkoffs that have not received any designations during the previous 2-year period.

71.10(5s)(d)3. 3. The 2 remaining checkoffs, described under subd. 2., shall be the 2 oldest checkoffs, based on the date each checkoff was placed on a list of checkoffs, maintained by the department, that are eligible to be placed on the form. If 2 or more checkoffs have been placed on the list at the same time, the oldest checkoff shall then be calculated according to their effective dates.

71.10(5s)(d)4. 4. If 10 checkoffs exist under this section after August 14, 2014, not including the checkoff under sub. (5fm), those 10 checkoffs may appear on the income tax form for the next 2 taxable years.

71.10(5s)(d)5. 5. If 11 checkoffs exist under this section after August 14, 2014, not including the checkoff under sub. (5fm), only the 9 highest ranking checkoffs for which designations were made in the previous 2-year period may appear on the income tax form for the next 2 taxable years. The remaining checkoff for which designations may be made and which shall be placed on the income tax form for the next 2 taxable years, in place of the lowest ranking checkoff, shall be a checkoff that has not received any designations during the previous 2-year period. This last checkoff shall be selected using the method described under subd. 3.

71.10(5s)(e) (e) For any taxable year that begins after December 31, 2014, individuals may not make a designation for any checkoff which did not generate at least an average of $50,000 of designations per year over the most recent 3-year period as certified by the secretary of revenue under subs. (5) (h) 3., (5e) (h) 2., (5f) (h) 2., (5fm) (h) 2., (5g) (h) 2., (5i) (h) 2., (5j) (h) 2., (5k) (h) 2., (5km) (h) 2., and (5m) (h) 2. Once a checkoff is affected by this paragraph, no further checkoffs may be designated to that checkoff in any taxable year.

71.10(5w) (5w) Anatomical gift.

71.10(5w)(a) (a) For taxable years beginning after December 31, 2023, the department shall place on the income tax form all of the following:

71.10(5w)(a)1. 1. A question as to whether the individual filing the income tax return wishes to include his or her name as a donor of an anatomical gift in the record of potential donors maintained by the department of transportation.

71.10(5w)(a)2. 2. A statement that an affirmative response to the question under subd. 1. authorizes an anatomical gift under s. 157.06.

71.10(5w)(a)3. 3. A statement that the individual is not required to respond to the question under subd. 1. in order to file the income tax return and pay taxes or receive a refund.

71.10(5w)(a)4. 4. A statement that the purpose of maintaining the record of potential donors is to facilitate the determination of whether an individual is a potential donor in the event of his or her death.

71.10(5w)(a)5. 5. A statement that the individual must be a resident who is at least 15 years of age or an emancipated minor to include his or her name as a donor of an anatomical gift in the record of potential donors maintained by the department of transportation.

71.10(5w)(b) (b)

71.10(5w)(b)1. 1. If a resident individual answers the question regarding anatomical gifts under par. (a) 1. in the affirmative, the department shall transmit to the department of transportation that authorization along with any other information about the individual that the department of health services determines to be necessary under s. 157.06 (20).

71.10(5w)(b)2. 2. Persons authorizing anatomical gifts under this subsection remain subject to s. 157.06.

71.10(6) (6) Married persons.

71.10(6)(a) (a) Joint returns. Persons filing a joint return are jointly and severally liable for the tax, interest, penalties, fees, additions to tax and additional assessments under this chapter applicable to the return. Except as provided in par. (e), a person shall be relieved of liability in regard to a joint return in the manner specified in section 6015 (a) to (d) and (f) of the Internal Revenue Code.

71.10(6)(b) (b) Separate returns. Except as provided in par. (e), a spouse filing a separate return may be relieved of liability for the tax, interest, penalties, fees, additions to tax and additional assessments under this chapter in the manner specified in section 66 (c) of the Internal Revenue Code. The department may not apply ch. 766 in assessing a taxpayer with respect to marital property income the taxpayer did not report if that taxpayer failed to notify the taxpayer’s spouse about the amount and nature of the income before the due date, including extensions, for filing the return for the taxable year in which the income was derived. The department shall include all of that marital property income in the gross income of the taxpayer and exclude all of that marital property income from the gross income of the taxpayer’s spouse.

71.10(6)(c) (c) Marital property agreements. The department of revenue shall notify a taxpayer whose separate return is under audit that a marital property agreement or unilateral statement under ch. 766 is effective for tax purposes for any period during which both spouses are domiciled in this state only if it is filed with the department before any assessment resulting from the audit is issued. A marital property agreement or unilateral statement under ch. 766 does not affect the determination of the income that is taxable by this state, or of the person who is required to report taxable income to this state, during the period that one or both spouses are not domiciled in this state or if it was not filed with the department before an assessment was issued.

71.10(6)(d) (d) Part-year residents and nonresidents. If a spouse is not domiciled in this state for the entire taxable year, the tax liability and reporting obligation of both spouses during the period a spouse is not domiciled in this state shall be determined without regard to ch. 766 except as provided in this chapter.

71.10(6)(e) (e) Application for relief. A person who seeks relief from liability under par. (a) or (b) shall apply for relief with the department, on a form prescribed by the department, within 2 years after the date on which the department first begins collection activities after July 27, 2005.

71.10(6m) (6m) Returns of formerly married and remarried persons.

71.10(6m)(a) (a) Except as provided in par. (c), a formerly married or remarried person filing a return for a period during which the person was married may be relieved of liability for the tax, interest, penalties, fees, additions to tax and additional assessments under this chapter from that period as if the person were a spouse under section 66 (c) of the Internal Revenue Code. The department may not apply ch. 766 in assessing the former spouse of the person with respect to marital property income that the former spouse did not report if that former spouse failed to notify the person about the amount and nature of the income before the due date, including extensions, for filing the return for the taxable year during which the income was derived. The department shall include all of that marital property income in the gross income of the former spouse and exclude all of that marital property income from the gross income of the person.

71.10(6m)(b) (b) The department may not apply ch. 766 or s. 71.55 (1), 71.61 (1) or 71.80 (3) or (3m) to collect from an individual for any tax liability owed to the department by the individual or by the former spouse of the individual if a judgment of divorce under ch. 767 apportions that liability to the former spouse of the individual and if the individual includes with his or her tax return a copy of that portion of the judgment of divorce that relates to the apportionment of tax liability.

71.10(6m)(c) (c) A person who seeks relief from liability under par. (a) shall apply for relief with the department as provided under sub. (6) (e).

71.10(7) (7) Minnesota income tax reciprocity.

71.10(7)(a) (a) For purposes of income tax reciprocity reached with the state of Minnesota under s. 71.05 (2), whenever the income taxes on residents of one state which would have been paid to the 2nd state without reciprocity exceed the income taxes on residents of the 2nd state which would have been paid to the first state without reciprocity, the state with the net revenue loss shall receive from the other state the amount of the loss. Interest shall be payable on all delinquent balances relating to taxable years beginning after the first December 31 after the date identified in the notice under 2023 Wisconsin Act 147, section 4 (2). The secretary of revenue may enter into agreements with the state of Minnesota specifying the reciprocity payment due date, conditions constituting delinquency, interest rates and the method of computing interest due on any delinquent amounts.

71.10(7)(b) (b) The data used for computing the loss to either state shall be determined by the respective departments of revenue of both states on or before November 1 of the year following the close of the previous calendar year. If an agreement cannot be reached as to the amount of the loss, the secretary of revenue of this state and the commissioner of taxation of the state of Minnesota shall each appoint a member of a board of arbitration and these members shall appoint a 3rd member of the board. The board shall select one of its members as chairperson. The board may administer oaths, take testimony, subpoena witnesses and require their attendance, require the production of books, papers and documents and hold hearings at such places as it deems necessary. The board shall then make a determination as to the amount to be paid the other state which shall be conclusive. This state shall pay no more than one-half of the cost of such arbitration.

71.10(7)(c) (c) For taxable years beginning after the first December 31 after the date identified in the notice under 2023 Wisconsin Act 147, section 4 (2), this state shall pay Minnesota interest on any reciprocity payment that is due under this subsection. Interest shall be calculated according to the Laws of Minnesota 2002 Chapter 377, or at another rate and under another method of calculation that is agreed to by Minnesota and Wisconsin.

71.10(7)(d) (d)

71.10(7)(d)1. 1. No agreement that is entered into under this subsection on or after March 23, 2024, may take effect unless all of the following apply:

71.10(7)(d)1.a. a. The agreement applies to wages, salaries, tips, and commissions received as an employee by persons who reside in this state or Minnesota for at least 183 days during their taxable years and who return to their state of residence at least once per month.

71.10(7)(d)1.b. b. The agreement contains no expiration or termination date.

71.10(7)(d)1.bm. bm. The governor issues a written notice of approval of the agreement no later than 90 days after being presented with the agreement under subd. 1m.

71.10(7)(d)1.cm. cm. The agreement may take effect under subd. 1s.

71.10(7)(d)1m. 1m. As soon as possible after the department reaches an agreement with the state of Minnesota, the department shall present the agreement to the governor and submit a copy of the agreement to the legislature under s. 13.172 (2).

71.10(7)(d)1s. 1s. After the governor issues a written notice of approval of the agreement under subd. 1. bm., the department shall notify the joint committee on finance in writing of the agreement. The agreement may take effect if within 14 working days of the notification the committee does not schedule a meeting for the purpose of reviewing the proposed agreement. If the committee schedules a meeting for the purpose of reviewing the agreement, the agreement may not take effect unless the committee approves the agreement.

71.10(7)(d)2. 2.

71.10(7)(d)2.a. a. This state may not make a payment under an agreement entered into under this subsection for any taxable year ending before March 23, 2024.

71.10(7)(d)2.b. b. An agreement entered into under this subsection may provide for making estimated payments during a year and for a final payment for the year to be made after computing the amount of the loss for the year as described in par. (b).

71.10(7)(d)3. 3. An agreement entered into under this subsection that takes effect on or after March 23, 2024, may not be revised unless the department notifies the joint committee on finance in writing of the proposed revised agreement. The proposed revised agreement may take effect if within 14 working days of the notification the committee does not schedule a meeting for the purpose of reviewing the proposed revised agreement. If the committee schedules a meeting for the purpose of reviewing the proposed revised agreement, the proposed revised agreement may not take effect unless the committee approves the proposed revised agreement.

71.10(7)(d)4. 4. An agreement entered into under this subsection may require that a study be conducted no more than once every 5 years to obtain information necessary to determine payments under this subsection.

71.10(7e) (7e) Illinois income tax reciprocity.

71.10(7e)(a) (a) For purposes of income tax reciprocity reached with the state of Illinois under s. 71.05 (2), whenever the income taxes on residents of one state which would have been paid to the 2nd state without reciprocity exceed the income taxes on residents of the 2nd state which would have been paid to the first state without reciprocity, the state with the net revenue loss shall receive from the other state the amount of the loss. Interest shall be payable on all delinquent balances relating to taxable years beginning after December 31, 1999. The secretary of revenue may enter into agreements with the state of Illinois specifying the reciprocity payment due date, conditions constituting delinquency, interest rates and the method of computing interest due on any delinquent amounts.

71.10(7e)(b) (b) The data used for computing the loss to either state shall be determined by the respective departments of revenue of both states on or before December 1 of the year following the close of the previous calendar year. If an agreement cannot be reached as to the amount of the loss, the secretary of revenue of this state and the director of taxation of the state of Illinois shall each appoint a member of a board of arbitration and these members shall appoint a 3rd member of the board. The board shall select one of its members as chairperson. The board may administer oaths, take testimony, subpoena witnesses and require their attendance, require the production of books, papers and documents and hold hearings at such places as it considers necessary. The board shall then make a determination as to the amount to be paid the other state which shall be conclusive. This state shall pay no more than 50 percent of the cost of such arbitration.

71.10(7e)(c) (c) The payments under this subsection may be made only if the secretary of revenue of this state and the director of taxation of the state of Illinois enter into a written agreement relating to income tax reciprocity that applies to taxable years beginning after December 31, 1997.

71.10(7m) (7m) Discharge of indebtedness; modifications. If a person excludes from gross income an amount of income from a discharge of indebtedness because of discharges of debts described under section 108 (a) of the internal revenue code, the person shall make the adjustments specified in section 108 (b) of the internal revenue code, but the net operating loss under s. 71.01 (14), not the federal net operating loss, and Wisconsin credits, not federal credits, and the capital loss carry-forward as limited under s. 71.05 (10) (c), not the federal capital loss carry-forward, shall be applied, and the reduction rate for a credit carry-over is 6.93 percent, not 33 1/3 percent.

71.10(8) (8) Penalties. Unless specifically provided in this subchapter, the penalties under subch. XIII apply for failure to comply with this subchapter unless the context requires otherwise.

71.10(9) (9) Publication of standard deduction and tax brackets. The department of revenue shall annually publish notice of the standard deduction amounts and the brackets for the individual income tax in the administrative register.

71.10 History History: 1987 a. 312; 1987 a. 411 ss. 94, 97, 176 to 179; 1987 a. 422 s. 4; 1989 a. 31, 56, 359; 1991 a. 39; 1993 a. 16, 184; 1995 a. 27, 209, 418, 453; 1997 a. 27, 63, 237, 248; 1999 a. 9, 167; 2001 a. 16, 109; 2003 a. 33, 99, 135, 176, 255, 321; 2005 a. 25, 49, 71, 74, 177, 178, 323, 361, 460, 479, 483; 2007 a. 1, 20, 96, 97; 2009 a. 2, 28, 89, 265, 269, 295, 332; 2011 a. 32, 76, 169, 212, 222, 232; 2011 a. 260 ss. 25, 80; 2013 a. 20, 62, 145; 2013 a. 165 s. 114; 2015 a. 55, 197, 218; 2017 a. 58, 59, 176, 197, 231, 364; 2019 a. 54; 2021 a. 58, 127; 2023 a. 138, 142, 147, 187.

subch. II of ch. 71 SUBCHAPTER II

SPECIAL PROVISIONS APPLICABLE TO FIDUCIARIES

71.12 71.12 Conformity. Unless specifically provided in this subchapter, fiduciaries shall be subject to all of the provisions, requirements and liabilities of this chapter, so far as applicable, unless the context requires otherwise.

71.12 History History: 1987 a. 312.

71.122 71.122 Definition. In this subchapter, “Wisconsin taxable income” means federal taxable income, as defined in s. 71.01 (4), as modified under s. 71.05 (6) to (12), (19) and (20).

71.122 History History: 1997 a. 27.

71.125 71.125 Imposition of tax.

71.125(1) (1) Except as provided in sub. (2), the tax imposed by this chapter on individuals and the rates under s. 71.06 (1), (1m), (1n), (1p), (1q), and (2) shall apply to the Wisconsin taxable income of estates or trusts, except nuclear decommissioning trust or reserve funds, and that tax shall be paid by the fiduciary.

71.125(2) (2) Each electing small business trust, as defined in section 1361 (e) (1) of the Internal Revenue Code, is subject to tax at the highest rate under s. 71.06 (1), (1m), (1n), (1p), or (1q), whichever taxable year is applicable, on its income as computed under section 641 of the Internal Revenue Code, as modified by s. 71.05 (6) to (12), (19) and (20).

71.125 History History: 1987 a. 312; 1997 a. 27, 237; 1999 a. 9; 2013 a. 20.

71.13 71.13 Filing returns.

71.13(1) (1) Estate or trust. Annual returns of income of an estate or a trust shall be made to the department by the fiduciary thereof at or before the time such income is required to be reported to the internal revenue service under the internal revenue code. Under such rules as the department prescribes, a return made by one of 2 or more joint fiduciaries shall be sufficient compliance with the requirements of this section. A return made pursuant to this subsection shall contain a statement that the fiduciary has sufficient knowledge of the affairs of the person for whom the return is made to enable him or her to make the return, and that the return is, to the best of his or her knowledge and belief, true and correct.

71.13(1m) (1m) Schedules to beneficiaries. Every fiduciary who is required to file a return under sub. (1) shall, on or before the due date of the return, including extensions, provide a schedule to each beneficiary whose share of income, deductions, credits, or other items of the fiduciary may affect the beneficiary’s tax liability under this chapter. The schedule shall separately indicate the beneficiary’s share of each item.

71.13(2) (2) Returns required prior to closing estate or trust.

71.13(2)(a) (a) A personal representative or trustee applying to a court having jurisdiction for a discharge of his or her trust and a final settlement of his or her accounts, before the application is granted, shall file all of the following with the department:

71.13(2)(a)1. 1. Returns of income received by the decedent, any previous guardian, personal representative, or trustee, during each of the years open to assessment under s. 71.77, if the returns had not previously been filed, including a return of income for the year of death to the date of death.

71.13(2)(a)2. 2. Returns of income received during the period of the personal representative’s or trustee’s administration or trust except for the final income tax year of the estate or trust.

71.13(2)(a)3. 3. Sales and use tax returns and withholding returns or reports that were required to be filed, if not previously filed.

71.13(2)(b) (b) Upon receipt of the returns described in par. (a), the department shall immediately determine the amount of taxes including interest, penalties, and costs to be payable, as well as any delinquent income, withholding, sales, and use taxes, penalties, interest, and costs due, and shall certify those amounts to the court. The court shall then enter an order directing the personal representative or trustee to pay the amounts found to be due by the department and take the department’s receipt for the amount paid. The receipt shall be evidence of the payment and shall be filed with the court before a final distribution of the estate or trust is ordered and the personal representative or trustee is discharged. The filing of the receipt shall in no manner affect the obligation of the personal representative or trustee to file income, sales, and withholding returns covering transactions reportable during the final taxable year of the estate or trust and to pay income, sales, use and withholding taxes, penalties, interest, and costs due as the result of such transactions.

71.13(3) (3) Required filing may be dispensed with by court. Returns of income required to be made by sub. (2) may be dispensed with by order of the court having jurisdiction in cases where it is clearly evident to the court that no income tax is due or to become due from the trust or estate.

71.13 History History: 1987 a. 312; 1989 a. 31; 2001 a. 102; 2009 a. 28; 2015 a. 216.

71.14 71.14 Situs of income. For purposes of determining the situs of income under this subchapter:

71.14(1) (1) The estate of a decedent shall be considered resident at the domicile of the decedent at the time of his or her death.

71.14(2) (2) A trust created at death by will, contract, declaration of trust or implication of law by a decedent who at the time of death was a resident of this state shall be considered resident at the domicile of the decedent at the time of the decedent’s death until transferred by the court having jurisdiction under s. 72.27 to another court’s jurisdiction. After jurisdiction is transferred, the trust shall be considered resident at the place to which jurisdiction is transferred. The hearing to transfer jurisdiction shall be held only after giving written notice to the department of revenue under s. 879.05.

71.14(3) (3) Except as provided in sub. (2) and s. 71.04 (1) (b) 2., trusts created by contract, declaration of trust or implication of law that are made irrevocable and were administered in this state before October 29, 1999, shall be considered resident at the place where the trust is being administered. The following trusts shall be considered to be administered in the state of domicile of the corporate trustee of the trust at any time that the grantor of the trust is not a resident of this state:

71.14(3)(a) (a) Trusts that have any assets invested in a common trust fund, as defined in section 584 of the internal revenue code, maintained by a bank or trust company domiciled in this state that is a member of the same affiliated group, as defined in section 1504 of the internal revenue code, as the corporate trustee.

71.14(3)(b) (b) Trusts the assets of which in whole or in part are managed, or about which investment decisions are made, by a corporation domiciled in this state if that corporation and the corporate trustee are members of the same affiliated group, as defined in section 1504 of the internal revenue code.

71.14(3m) (3m) 

71.14(3m)(a) (a) Subject to par. (b) and except as provided in sub. (2) and s. 71.04 (1) (b) 2., only the following trusts, or portions of trusts, that become irrevocable on or after October 29, 1999, or that became irrevocable before October 29, 1999, and are first administered in this state on or after October 29, 1999, are resident of this state:

71.14(3m)(a)1. 1. Trusts, or portions of trusts, the assets of which consist of property placed in the trust by a person who is a resident of this state at the time that the property was placed in the trust if, at the time that the assets were placed in the trust, the trust was irrevocable.

71.14(3m)(a)2. 2. Trusts, or portions of trusts, the assets of which consist of property placed in the trust by a person who is a resident of this state at the time that the trust became irrevocable if, at the time that the property was placed in the trust, the trust was revocable.

71.14(3m)(b) (b) A trust described under par. (a):

71.14(3m)(b)1. 1. Is revocable if the person whose property constitutes the trust may revest title to the property in that person.

71.14(3m)(b)2. 2. Is irrevocable if the power to revest title, as described in subd. 1., does not exist.