Chapter Tax 14

Chapter Tax 14

HOMESTEAD CREDIT

Tax 14.01   Administrative provisions.

Tax 14.02   Qualification for credit.

Tax 14.03   Household income and income.

Tax 14.04   Property taxes accrued.

Tax 14.05   Gross rent and rent constituting property taxes accrued.

Tax 14.06   Marriage, separation or divorce during a claim year.

Ch. Tax 14 Note Note: Chapter Tax 14 as it existed on February 28, 1990 was repealed and a new chapter Tax 14 was created effective March 1, 1990.

Tax 14.01 Tax 14.01 Administrative provisions.

Tax 14.01(1) (1) Purpose. This section describes the Wisconsin homestead credit, defines terms and sets forth administrative provisions applicable to all sections of this chapter.

Tax 14.01(2) (2) Definitions. In this chapter and in ss. 71.51 to 71.55, Stats.:

Tax 14.01(2)(a) (a) “County relief” means assistance provided by a county under s. 59.53 (21), Stats., to an eligible dependent person. County relief is a separate program in itself, funded by a block grant program under subch. II of ch. 49, Stats. It does not include other assistance programs, such as social security, supplemental security income, state supplemental payments, federal food stamps, Title XX benefits, community options program payments, aid to families with dependent children, Wisconsin works payments or foster care.

Tax 14.01(2)(am) (am) “Disqualified loss” has the meaning given in s. 71.52 (1e), Stats.

Tax 14.01(2)(b) (b) “Domicile” has the same meaning for Wisconsin homestead credit purposes as for Wisconsin individual income tax purposes. A claimant’s domicile is the true, fixed and permanent home where the claimant intends to remain permanently and indefinitely and to which, whenever absent, the claimant intends to return. It is often referred to as a “legal residence.” A claimant may be physically present or residing in one locality and maintain a domicile in another but may have only one domicile at any time.

Tax 14.01(2)(c) (c) “Domiciled” means maintained a domicile.

Tax 14.01(2)(d) (d) “Dwelling” means the principal dwelling of a qualified household.

Tax 14.01(2)(e) (e) “Household” means a claimant and an individual related to the claimant as husband or wife residing in the same homestead as the claimant.

Tax 14.01(3) (3) Wisconsin homestead credit.

Tax 14.01(3)(a) (a) Sections 71.51 to 71.55, Stats., provide credit in the form of an income tax credit or a refund to qualifying persons who own or rent their Wisconsin homestead. A claimant may claim Wisconsin property taxes accrued or rent constituting property taxes accrued or both on the claimant’s homestead or, in certain cases as described in s. Tax 14.04 (3) (e), Wisconsin property taxes accrued on the claimant’s former homestead, as a basis for calculating a credit against Wisconsin income tax otherwise due. If the credit exceeds the claimant’s Wisconsin income tax otherwise due or if no income tax is due, the amount not offset against Wisconsin income tax and not applied against any liability under s. 71.55 (1), Stats., is paid to the claimant.

Tax 14.01(3)(b) (b) Under s. 71.54 (3), Stats., if an approved homestead credit claim by a qualified claimant is more than zero but less than $10, the amount of credit paid or credited shall be $10.

Tax 14.01(3)(c) (c) Wisconsin homestead credit claims shall be calculated on a calendar year basis.

Tax 14.01(4) (4) How to file.

Tax 14.01(4)(a) (a) A homestead credit claim shall be filed on schedule H or H-EZ, titled “Wisconsin homestead credit.”

Tax 14.01 Note Note: Schedules H and H-EZ are available from the department’s website at www.revenue.wi.gov.

Tax 14.01(4)(b) (b) If a person or the person’s spouse files a Wisconsin income tax return and claims a homestead credit on the return, the claimant shall attach schedule H or H-EZ to the income tax return. If the claimant has previously filed the income tax return or is filing an income tax return separately from the schedule H or H-EZ, the preferred procedure for filing a homestead credit claim is to file a duplicate copy of the income tax return with schedule H or H-EZ and to write the words “Duplicate” on the top of the first page of the tax return copy and “Income Tax Return Separately Filed” on the top of schedule H or H-EZ.

Tax 14.01(4)(c) (c) If neither the claimant nor the claimant’s spouse is required to file a Wisconsin income tax return for the year to which the claim relates, the claimant may file schedule H or H-EZ without attaching it to a return.

Tax 14.01(5) (5) Time within which original and amended claims shall be filed.

Tax 14.01(5)(a) (a) Under s. 71.53 (2) (a), Stats., an original homestead credit claim shall be filed with the department in conformity with the filing requirements of s. 71.03 (6), (6m) and (7), Stats., or the department shall disallow the claim. The deadline for filing a claim is as follows:

Tax 14.01(5)(a)1. 1. A claim filed for a taxable year for which an income tax return is also filed shall be filed on a calendar year basis as provided in sub. (3) (c), within 4 years, 3 ½ months of the end of the calendar year to which the claim relates.

Tax 14.01(5)(a)2. 2. Under s. 71.03 (6m), Stats., a claim filed by a person who is not required to file an income tax return shall be filed on a calendar year basis. The claim shall be filed within 4 years, 3 ½ months of the end of the calendar year to which the claim relates.

Tax 14.01 Note Example: A 2018 homestead credit claim filed for the calendar year ending December 31, 2018, must be filed by April 15, 2023.

Tax 14.01(5)(b) (b) A claimant who files a timely original claim may subsequently file an amended claim with the department. Under s. 71.75 (2), Stats., an amended claim shall be filed within 4 years of the deadline for filing the original claim or the department shall disallow the claim.

Tax 14.01 Note Example: Claimant A, who filed a 2015 homestead credit claim on May 1, 2017, wishes to file an amended 2015 claim. The amended claim may be filed any time on or before April 15, 2024, since the deadline for filing the original 2015 claim was April 15, 2020.

Tax 14.01(6) (6) Proof of claim. Under s. 71.55 (7), Stats., for the purpose of determining the correct amount of homestead credit of a claimant, the claimant shall supply to the department all of the following information that is applicable:

Tax 14.01(6)(a) (a) All information requested on the form.

Tax 14.01(6)(b) (b) Proper verification of property taxes accrued as provided in s. Tax 14.04 (4), if the claimant claims property taxes accrued.

Tax 14.01(6)(c) (c) Proper verification of rent constituting property taxes accrued as provided in s. Tax 14.05 (4), if the claimant claims rent constituting property taxes accrued.

Tax 14.01(6)(d) (d) The signature of the claimant. If a claimant is unable to sign a claim, the claimant may make an “X” or other mark with the assistance of another person who signs the claim as a witness to the validity of the signature. A legally authorized representative such as a guardian or attorney-in-fact may sign a homestead credit claim in lieu of a living claimant, but a homestead credit claim filed on behalf of a person who is deceased at the time of filing shall be denied as provided in s. Tax 14.02 (11).

Tax 14.01(7) (7) Incorrect claims.

Tax 14.01(7)(a) (a) The department may give notice of an incorrect homestead credit amount. The department may correct incorrect claims by adjusting the credit claimed, by assessment as income taxes are assessed or by refund, as appropriate. Under ss. 71.74 (8) (a) and 71.77 (2), Stats., unless the adjustment period is extended by a specific statutory provision, the notice shall be given by the later of 4 years from the unextended due date of the corresponding original income tax return or 4 years from the date a late-filed income tax return is filed. The statutory provisions under which the adjustment period may be extended include the following:

Tax 14.01(7)(a)1. 1. The “intent to defeat or evade” provision under s. 71.77 (3), Stats.

Tax 14.01(7)(a)2. 2. The “extension agreement” provision under s. 71.77 (5), Stats.

Tax 14.01(7)(a)3. 3. The “six-year” provision under s. 71.77 (7) (a), Stats.

Tax 14.01(7)(a)4. 4. The “federal change” provisions under s. 71.77 (7) (b), Stats.

Tax 14.01(7)(b) (b) Under s. 71.75 (7), Stats., the department shall act on a claim for homestead credit within one year after it receives the claim, or the credit shall be allowed even if incorrect, unless the claimant has agreed in writing to an extension of the one-year time period. Within the one-year period, prior to allowing the credit, the claimed credit may be reduced. However, under s. 71.74 (8) (a), Stats., if the date of acting on an amended claim is later than the last date for adjusting an original claim as provided in par. (a), the credit may not be reduced to an amount less than the credit allowed on the original claim, and after allowing the credit on the amended claim no further reduction of the credit may be made.

Tax 14.01 Note Example: Claimant A timely files a 2013 claim for homestead credit and receives a homestead credit of $500. On November 1, 2019, Claimant A files an amended 2013 claim for homestead credit claiming a revised 2013 credit of $700. Upon review of the file, the department determines that Claimant A’s correct homestead credit for 2013 is $300 rather than the $500 allowed on the original claim or the $700 claimed on the amended claim.

Tax 14.01 Note Since the amended 2013 homestead credit claim will be acted on after April 15, 2018, the last date for adjusting an original 2013 claim, the department must act on the amended claim by November 1, 2020. Prior to that date the department may notify Claimant A that no additional credit is allowable for 2013. However, the $200 of excessive credit allowed on the original claim, the difference between the $500 allowed and the correct credit of $300, may not be recovered by the department.

Tax 14.01(8) (8) interest on incorrect claims.

Tax 14.01(8)(a) (a) Excessive claims. Under s. 71.82 (1) (c), Stats., excessive homestead credit amounts, not the result of negligence or fraudulent intent, that have been paid or credited shall be subject to interest at 12% per year from the deadline for filing the claim. Assessments to collect excessive homestead credit amounts payable before the deadline for filing the claim may not include interest charges.

Tax 14.01(8)(b) (b) Understated claims. Under s. 71.55 (4), Stats., the department may not pay interest on any homestead credit, including any additional credit, refund or payment allowed as the result of the review of a homestead credit claim or an amended claim.

Tax 14.01 Note Note: Blank forms for filing a homestead credit claim, rent certificates and instructions for claiming the credit may be obtained at any department office throughout the state or by writing to Wisconsin Department of Revenue, P.O. Box 8903, Madison, WI 53708-8903.

Tax 14.01 Note Note: Section Tax 14.01 interprets ss. 71.03 (6m), 71.51 to 71.55, 71.74 (8) (a), 71.75 (2) and (7), 71.77 (2) and 71.82 (1) (c), Stats.

Tax 14.01 History History: 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 Tax 14.02 Qualification for credit.

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 Note Note: 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 Note Example: 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 Note The 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 Note Examples: Examples of 2 dwellings occupied concurrently include:

Tax 14.02 Note 1) A claimant maintains a permanent homestead and lives part of the year at a summer cottage which he or she owns.

Tax 14.02 Note 2) 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 Note Examples: 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 Note 2) 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 Note Example: 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.