Chapter 71

71.47(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.

71.47(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.

71.47(8b)(d) (d) Recapture.

71.47(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.

71.47(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.

71.47(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.

71.47(10) (10) Employee college savings account contribution credit.

71.47(10)(a) (a) Definitions. In this subsection:

71.47(10)(a)1. 1. “Claimant” means a person who files a claim under this subsection.

71.47(10)(a)1m. 1m. “College savings account” means a college savings account, as described in s. 224.50.

71.47(10)(a)2. 2. “Employee” has the meaning given in s. 71.63 (2).

71.47(10)(b) (b) Filing claims. Subject to the limitations provided in this subsection, a claimant may claim as a credit against the tax imposed under s. 71.43, up to the amount of those taxes, for each employee of the claimant, an amount equal to the amount the claimant paid into a college savings account owned by the employee in the taxable year in which the contribution is made.

71.47(10)(c) (c) Limitations.

71.47(10)(c)1. 1. 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 their payment of amounts under par. (b). A partnership, limited liability company, or tax-option corporation shall compute the amount of the 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.

71.47(10)(c)2. 2. The maximum amount of the credit per employee that a claimant may claim under this subsection is an amount equal to 50 percent of the amount the claimant contributed to the employee’s college savings account, not to exceed a maximum credit of $800. For taxable years beginning after December 31, 2024, the dollar amount in this subdivision shall be increased each year by a percentage equal to the percentage change between the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August of the previous year and the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August 2023, as determined by the federal department of labor, except that the adjustment may occur only if the resulting amount is greater than the corresponding amount that was calculated for the previous year. The amount that is revised under this subdivision shall be rounded to the nearest multiple of $10 if the revised amount is not a multiple of $10 or, if the revised amount is a multiple of $5, such an amount shall be increased to the next higher multiple of $10. The department of revenue shall annually adjust the change in the dollar amount required under this subdivision and incorporate the change into the income tax forms and instructions.

71.47(10)(c)3. 3. A credit may be claimed under par. (b) only if, for federal income tax purposes, the compensation of the employee described in par. (b) is reported, or required to be reported, on a W-2 form issued by the claimant.

71.47(10)(d) (d) 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.

71.47 History History: 1987 a. 312, 411, 422; 1989 a. 31, 44, 56, 100, 336, 359; 1991 a. 39, 292, 315; 1993 a. 16, 112; 1995 a. 27 ss. 3407m to 3412m, 9116 (5); 1995 a. 209, 227, 417; 1997 a. 27, 41, 237, 299; 1999 a. 5, 9; 2001 a. 16; 2003 a. 72, 99, 135, 255, 267, 326; 2005 a. 25, 74, 97, 361, 387, 452, 479, 483, 487; 2007 a. 20, 96, 97, 100; 2009 a. 2, 11, 28, 180, 185, 265, 267, 269, 276, 294, 295, 332, 401; 2011 a. 3, 15, 32, 67, 212, 213, 232, 237; 2011 a. 260 ss. 80, 81; 2013 a. 20, 62, 116, 145; 2015 a. 55, 186, 237; 2017 a. 59, 176, 197; 2017 a. 365 s. 111; 2017 a. 366; 2019 a. 54; 2021 a. 1, 58, 127; 2021 a. 238 s. 44; 2023 a. 19, 138, 143, 148; s. 35.17 correction in (1dx) (a) 2.

71.48 71.48 Payments of estimated taxes. Sections 71.29 and 71.84 (2) shall apply to insurers subject to taxation under this chapter.

71.48 History History: 1987 a. 312.

71.49 71.49 General provisions.

71.49(1) (1) Computation order. Notwithstanding any other provisions in this chapter, corporations computing liability for the tax under s. 71.43 (1) or (2) shall make computations in the following order:

71.49(1)(a) (a) Tax under s. 71.43 (1) or (2).

71.49(1)(b) (b) Manufacturing sales tax credit under s. 71.47 (3).

71.49(1)(bb) (bb) Manufacturing investment credit under s. 71.47 (3t).

71.49(1)(bm) (bm) Dairy investment credit under s. 71.47 (3n).

71.49(1)(bn) (bn) Community rehabilitation program credit under s. 71.47 (5k).

71.49(1)(c) (c) Research credit under s. 71.47 (4), except as provided under par. (f).

71.49(1)(cd) (cd) Postsecondary education credit under s. 71.47 (5r).

71.49(1)(ce) (ce) Water consumption credit under s. 71.47 (5rm).

71.49(1)(cn) (cn) Biodiesel fuel production credit under s. 71.47 (3h).

71.49(1)(cs) (cs) Low-income housing credit under s. 71.47 (8b).

71.49(1)(d) (d) Research facilities credit under s. 71.47 (5).

71.49(1)(db) (db) Super research and development credit under s. 71.47 (4m).

71.49(1)(dm) (dm) Health Insurance Risk-Sharing Plan assessments credit under s. 71.47 (5g).

71.49(1)(dp) (dp) Veteran employment credit under s. 71.47 (6n).

71.49(1)(ds) (ds) Ethanol and biodiesel fuel pump credit under s. 71.47 (5j).

71.49(1)(e) (e) Community development finance credit under s. 71.47 (1).

71.49(1)(ei) (ei) Development zone capital investment credit under s. 71.47 (1dm).

71.49(1)(eL) (eL) Development zones credit under s. 71.47 (1dx).

71.49(1)(ema) (ema) Economic development tax credit under s. 71.47 (1dy).

71.49(1)(eon) (eon) Technology zones credit under s. 71.47 (3g).

71.49(1)(eop) (eop) Early stage seed investment credit under s. 71.47 (5b).

71.49(1)(ep) (ep) Supplement to federal historic rehabilitation credit under s. 71.47 (6).

71.49(1)(epa) (epa) Electronic medical records credit under s. 71.47 (5i).

71.49(1)(ey) (ey) Employee college savings account contribution credit under s. 71.47 (10).

71.49(1)(f) (f) The total of farmland preservation credit under subch. IX, jobs credit under s. 71.47 (3q), enterprise zone jobs credit under s. 71.47 (3w), business development credit under s. 71.47 (3y), research credit under s. 71.47 (4) (k) 1., and estimated tax payments under s. 71.48.

71.49(2) (2) Elections under internal revenue code. Elections authorized by and made in accordance with the internal revenue code, except an election to file consolidated returns or to claim a credit against federal tax liability rather than a deduction from income, shall be deemed elections for the purpose of applying this chapter.

71.49(3) (3) 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.

71.49 History History: 1987 a. 312, 411; 1989 a. 31, 56; 1991 a. 39; 1995 a. 27, 209; 1997 a. 27; 2001 a. 16; 2003 a. 99, 135, 255; 2005 a. 74, 361, 479, 483; 2007 a. 20; 2009 a. 2, 28, 265, 269, 295, 332; 2011 a. 3, 32, 212, 232; 2011 a. 260 ss. 27, 80; 2015 a. 55; 2015 a. 197 s. 51; 2017 a. 59, 176, 197; 2019 a. 54; 2021 a. 127; 2023 a. 138.

subch. VIII of ch. 71 SUBCHAPTER VIII

HOMESTEAD CREDIT

Subch. VIII of ch. 71 Cross-reference Cross-reference: See also ch. Tax 14, Wis. adm. code.

71.51 71.51 Purpose. The purpose of this subchapter is to provide credit to certain persons who own or rent their homestead, through a system of income tax credits and refunds, and appropriations from the general fund.

71.51 History History: 1987 a. 312.

71.52 71.52 Definitions. In this subchapter, unless the context clearly indicates otherwise:

71.52(1) (1) “Claimant” means a person who has filed a claim under this subchapter and who was domiciled in this state during the entire calendar year to which the claim for credit under this subchapter relates. 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.

71.52(1d) (1d) “Disabled” means an individual who is unable to engage in any substantial gainful employment by reason of a medically determinable physical or mental impairment which has lasted or is reasonably expected to last for a continuous period of not less than 12 months.

71.52(1e) (1e) “Disqualified loss” means the sum of the following amounts, exclusive of net gains from the sale or exchange of capital or business assets and exclusive of net profits:

71.52(1e)(a) (a) Net loss from sole proprietorships.

71.52(1e)(b) (b) Net capital loss.

71.52(1e)(c) (c) Net loss from sales of business property, excluding loss from involuntary conversions.

71.52(1e)(d) (d) Net loss from rental real estate, royalties, partnerships, tax-option S corporations, trusts, estates, and real estate mortgage investment conduits.

71.52(1e)(e) (e) Net farm loss.

71.52(1g) (1g) “Earned income” means wages, salaries, tips, and other employee compensation that may be included in federal adjusted gross income for the taxable year, plus the amount of the claimant’s net earnings from self-employment for the taxable year determined with regard to the deduction allowed to the taxpayer by section 164 (f) of the Internal Revenue Code. For purposes of this subsection, a claimant’s earned income is computed without regard to any marital property laws and a claimant may elect to treat amounts excluded from federal adjusted gross income as earned income, as provided under section 112 of the Internal Revenue Code. “Earned income” does not include the following:

71.52(1g)(a) (a) Any amount received as a pension or annuity.

71.52(1g)(b) (b) Any amount to which section 871 (a) of the Internal Revenue Code applies.

71.52(1g)(c) (c) Any amount received for services provided by an individual while the individual is an inmate at a penal institution.

71.52(1g)(d) (d) Any amount received for service performed in work activities under paragraphs (4) or (7) of section 407 (d) of the Social Security Act to which the claimant is assigned under any state program under part A of title IV of the Social Security Act. This paragraph applies only to amounts subsidized under any such state program.

71.52(1m) (1m) “Farmer,” “farming,” and “farm premises” have the meanings given in s. 102.04 (3).

71.52(2) (2) “Gross rent” means rental paid at arm’s length, solely for the right of occupancy of a homestead. “Gross rent” does not include, whether expressly set out in the rental agreement or not, charges for any medical services; other personal services such as laundry, transportation, counseling, grooming, recreational and therapeutic services; shared living expenses, including but not limited to food, supplies and utilities unless utility payments are included in the gross rent paid to the landlord; and food furnished by the landlord as a part of the rental agreement. “Gross rent” includes the rental paid to a landlord for parking of a mobile home or manufactured home, exclusive of any charges for food furnished by the landlord as a part of the rental agreement, plus monthly municipal permit fees paid under s. 66.0435 (3) (c) for a rented mobile home or manufactured home. If a homestead is an integral part of a multipurpose or multidwelling building, “gross rent” is the percentage of the gross rent on that part of the multipurpose or multidwelling building occupied by the household as a principal residence plus the same percentage of the gross rent on the land surrounding it, not exceeding one acre, that is reasonably necessary for use of the multipurpose or multidwelling building as a principal residence, except as the limitations under s. 71.54 (2) (b) apply. If the homestead is part of a farm, “gross rent” is the rent on up to 120 acres of the land contiguous to the claimant’s principal residence plus the rent on all improvements to real property on that land, except as the limitations under s. 71.54 (2) (b) apply. If a claimant and persons who are not members of the claimant’s household reside in a homestead, the claimant’s “gross rent” is the gross rent paid by the claimant to the landlord for the homestead.

71.52(3) (3) “Homestead” means the dwelling, whether rented or owned, including owned as a joint tenant or tenant in common, or occupied as a buyer in possession under a land contract, and the land surrounding it, not exceeding one acre, that is reasonably necessary for use of the dwelling as a home, and may consist of a part of a multidwelling or multipurpose building and a part of the land upon which it is built.

71.52(4) (4) “Household” means a claimant and an individual related to the claimant as husband or wife.

71.52(5) (5) “Household income” means all income received by all persons of a household in a calendar year while members of the household, less $500 for each of the claimant’s dependents, as defined in section 152 of the internal revenue code, who have the same principal abode as the claimant for more than 6 months during the year to which the claim relates.

71.52(6) (6) “Income” means the sum of Wisconsin adjusted gross income and the following amounts, to the extent not included in Wisconsin adjusted gross income: maintenance payments (except foster care maintenance and supplementary payments excludable under section 131 of the internal revenue code), support money, cash public assistance (not including credit granted under this subchapter and amounts under s. 46.27, 2017 stats.), cash benefits paid by counties under s. 59.53 (21), the gross amount of any pension or annuity (including railroad retirement benefits, all payments received under the federal social security act and veterans disability pensions), nontaxable interest received from the federal government or any of its instrumentalities, nontaxable interest received on state or municipal bonds, worker’s compensation, unemployment insurance, the gross amount of “loss of time” insurance, compensation and other cash benefits received from the United States for past or present service in the armed forces, scholarship and fellowship gifts or income, capital gains, gain on the sale of a personal residence excluded under section 121 of the internal revenue code, dividends, income of a nonresident or part-year resident who is married to a full-year resident, housing allowances provided to members of the clergy, the amount by which a resident manager’s rent is reduced, nontaxable income of an American Indian, nontaxable income from sources outside this state and nontaxable deferred compensation. Intangible drilling costs, depletion allowances and depreciation, including first-year depreciation allowances under section 179 of the internal revenue code, amortization, contributions to individual retirement accounts under section 219 of the internal revenue code, contributions to Keogh plans, net operating loss carry-backs and carry-forwards, capital loss carry-forwards, and disqualified losses deducted in determining Wisconsin adjusted gross income shall be added to “income”. “Income” does not include gifts from natural persons, cash reimbursement payments made under title XX of the federal social security act, surplus food or other relief in kind supplied by a governmental agency, the gain on the sale of a personal residence deferred under section 1034 of the internal revenue code or nonrecognized gain from involuntary conversions under section 1033 of the internal revenue code. Amounts not included in adjusted gross income but added to “income” under this subsection in a previous year and repaid may be subtracted from income for the year during which they are repaid. Scholarship and fellowship gifts or income that are included in Wisconsin adjusted gross income and that were added to household income for purposes of determining the credit under this subchapter in a previous year may be subtracted from income for the current year in determining the credit under this subchapter. A marital property agreement or unilateral statement under ch. 766 has no effect in computing “income” for a person whose homestead is not the same as the homestead of that person’s spouse.

71.52(7) (7) “Property taxes accrued” means real property taxes or monthly municipal permit fees under s. 66.0435 (3) (c), exclusive of special assessments, delinquent interest and charges for service, levied on a homestead owned by the claimant or a member of the claimant’s household. “Real property taxes” means those levied under ch. 70, less the tax credit, if any, afforded in respect of such property by s. 79.10. If a homestead is owned by 2 or more persons or entities as joint tenants or tenants in common or is owned as marital property or survivorship marital property and one or more such persons, entities or owners is not a member of the claimant’s household, property taxes accrued is that part of property taxes accrued levied on such homestead, reduced by the tax credit under s. 79.10, that reflects the ownership percentage of the claimant and the claimant’s household, except that if a homestead is owned by 2 or more natural persons or if 2 or more natural persons have an interest in a homestead, one or more of whom is not a member of the claimant’s household, and the claimant has a present interest, as that term is used in s. 700.03 (1), in the homestead and is required by the terms of a will that transferred the homestead or interest in the homestead to the claimant to pay the entire amount of property taxes levied on the homestead, property taxes accrued is property taxes accrued levied on such homestead, reduced by the tax credit under s. 79.10. A marital property agreement or unilateral statement under ch. 766 has no effect in computing property taxes accrued for a person whose homestead is not the same as the homestead of that person’s spouse. For purposes of this subsection, property taxes are “levied” when the tax roll is delivered to the local treasurer for collection. If a homestead is sold or purchased during the calendar year of the levy, the property taxes accrued for the seller and the buyer are the amount of the tax levy prorated to each in proportion to the periods of time each both owned and occupied the homestead during the year to which the claim relates. The seller may use the closing agreement pertaining to the sale of the homestead, the property tax bill for the year before the year to which the claim relates or the property tax bill for the year to which the claim relates as the basis for computing property taxes accrued, but those taxes are allowable only for the portion of the year during which the seller owned and occupied the sold homestead. 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 under s. 71.54 (1). If a homestead is an integral part of a multipurpose or multidwelling building, property taxes accrued are the percentage of the property taxes accrued on that part of the multipurpose or multidwelling building occupied by the household as a principal residence plus that same percentage of the property taxes accrued on the land surrounding it, not exceeding one acre, that is reasonably necessary for use of the multipurpose or multidwelling building as a principal residence, except as the limitations of s. 71.54 (2) (b) apply. If the homestead is part of a farm, property taxes accrued are the property taxes accrued on up to 120 acres of the land contiguous to the claimant’s principal residence and include the property taxes accrued on all improvements to real property located on such land, except as the limitations of s. 71.54 (2) (b) apply.

71.52(8) (8) “Rent constituting property taxes accrued”, except as provided in ss. 71.54 (2) and 71.55 (8), means 25 percent, or 20 percent if heat is included, of the gross rent actually paid in cash or its equivalent by a claimant and his or her household solely for the right of occupancy of their Wisconsin homestead during the calendar year to which the claim relates if that rent constitutes the basis, in the succeeding calendar year, of a claim for relief under this subchapter by such claimant. A marital property agreement or unilateral statement under ch. 766 has no effect in computing rent constituting property taxes accrued for a person whose homestead is not the same as the homestead of that person’s spouse.

71.52 History History: 1987 a. 312, 411; 1989 a. 31, 100; 1991 a. 39, 195; 1995 a. 27, 201; 1997 a. 27, 39; 1999 a. 150 s. 672; 2007 a. 11; 2009 a. 28; 2013 a. 145; 2017 a. 59; 2019 a. 9; 2021 a. 1; 2023 a. 12.

71.52 Cross-reference Cross-reference: See also ch. Tax 14, Wis. adm. code.

71.53 71.53 Filing claims.

71.53(1) (1) Eligibility for credit.

71.53(1)(a) (a) Subject to the limitations provided in this subchapter and s. 71.80 (3) and (3m), a claimant may claim as a credit against Wisconsin income taxes otherwise due, Wisconsin property taxes accrued, or rent constituting property taxes accrued, or both. If the allowable amount of claim exceeds the income taxes otherwise due on the claimant’s income or if there are no Wisconsin income taxes due on the claimant’s income, the amount of the claim not used as an offset against income taxes shall be certified to the department of administration for payment to the claimant by check, share draft or other draft drawn on the general fund.

71.53(1)(b) (b) The right to file a claim under this subchapter 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 subchapter may be exercised on behalf of a living claimant by the claimant’s legal guardian or attorney-in-fact.

71.53(1)(c) (c) Only one claimant per household per year shall be entitled to credit under this subchapter.

71.53(2) (2) Ineligible claims. No claim under this subchapter may be allowed if any of the following conditions applies:

71.53(2)(a) (a) Such claim is not filed with the department of revenue in conformity with the filing requirements in s. 71.03 (6) and (7).

71.53(2)(b) (b) The department finds that the claimant received title to his or her homestead primarily for the purpose of receiving benefits under this subchapter.

71.53(2)(c) (c) The claimant was under 18 years of age at the close of the year to which the claim relates.

71.53(2)(d) (d) The claimant was claimed as a dependent for federal income tax purposes by another person during the year to which the claim relates but this limitation shall not apply if the claimant was 62 years of age or older at the close of the year to which the claim relates.