Tax 2.955(4)(b)(b) For a Wisconsin resident shareholder in a tax-option (S) corporation, the federal subchapter S status of which is recognized by the other state, partner in a partnership, or member in a limited liability company:

Tax 2.955(4)(b)1.1. If a Wisconsin resident shareholder, partner, or member files an individual income tax return with that state, submit a copy of the other state’s income tax return with the Wisconsin income tax return.

Tax 2.955(4)(b)2.2. If the corporation, partnership, or limited liability company files a combined or composite return with that state on behalf of its shareholders, partners, or members who are nonresidents of that state and pays the tax on their proportionate share of the income earned there, submit with the Wisconsin income tax return either a copy of the Wisconsin Schedule 5K-1 or 3K-1 on which is shown the shareholder’s, partner’s, or member’s share of tax paid to that state, or a letter as provided in par. (d).

Tax 2.955(4)(b)3.3. If the corporation, partnership, or limited liability company files a corporate or partnership income or franchise tax return with that state and pays tax on or measured by income earned there that is attributable to its shareholders, partners, or members who are nonresidents of that state, submit with the Wisconsin income tax return either a copy of the Wisconsin Schedule 5K-1 or 3K-1 on which is shown the shareholder’s, partner’s, or member’s share of tax paid to that state, or a letter as provided in par. (d).

Tax 2.955(4)(c)(c) For a Wisconsin resident shareholder in a tax-option (S) corporation, the federal subchapter S status of which is not recognized by the other state, if the corporation pays an income or franchise tax on or measured by the income earned there, submit with the Wisconsin income tax return either a copy of the Wisconsin Schedule 5K-1 on which is shown the shareholder’s share of tax paid to that state, or a letter as provided in par. (d).

Tax 2.955(4)(d)(d) If the tax-option (S) corporation, partnership, or limited liability company is not subject to Wisconsin’s income or franchise tax, a Wisconsin resident shareholder, partner, or member shall submit with the Wisconsin income tax return a letter provided by the corporation, partnership, or limited liability company in lieu of Wisconsin Schedule 5K-1 or 3K-1 as required in pars. (b) 2. and 3. and (c). The letter shall include a schedule showing the shareholder’s, partner’s, or member’s proportionate share of the items of income taxable by that state, the adjusted gross income, and the net tax paid.

Tax 2.955(4)(e)1.1. If the corporation, partnership, or limited liability company files a corporate or partnership income or franchise tax return with another state, submit a copy of the other state’s income or franchise tax return with Wisconsin Form 3 or 5S.

Tax 2.955(4)(e)2.2. If the corporation, partnership, or limited liability company files a combined or composite return with another state on behalf of its shareholders, partners, or members who are nonresidents of that state and pays tax on their proportionate share of the income taxable to the other state, submit a copy of the other state’s combined or composite income or franchise tax return with Wisconsin Form 3 or 5S.

Tax 2.955(5)(5) Year in which to claim income tax credit. The credit for income tax paid to another state shall be claimed on the Wisconsin return for the year in which the out-of-state income is considered taxable Wisconsin income.

Tax 2.955 NoteExample: A Wisconsin resident receives income of $4,000 in 2018 from rental property located in Iowa. The person files a 2018 declaration of estimated tax of $200 with Iowa, with $150 of estimated tax payments being made in 2018 and the fourth quarter payment of $50 being made in January 2019. The Iowa income of $4,000 is reported as income on the 2018 Iowa and Wisconsin returns. The 2018 Iowa income tax return shows the following:

Tax 2.955 HistoryHistory: Cr. Register, December, 1978, No. 276, eff. 1-1-79; am. (4) (b), Register, January, 1981, No. 301, eff. 2-1-81; r. (2) (a) and (b), (3) (b), am. (2) (c), (3) (d) and (4), renum. (3) (c) to be (3) (b), r. and recr. (5), Register, September, 1983, No. 333, eff. 10-1-83; am. (1), (2), (3) (a) and (b), (4) (intro.), renum. (3) (cv) to be (3) (d), cr. (2) (b), (3) (c), (4) (c) and (d), r. and recr. (4) (a) and (b), Register, June, 1990, No. 414, eff. 7-1-90; am. (3) (intro.), (a), (4) (b) 2., 3., (c) and (d), Register, April, 1993, No. 448, eff. 5-1-93; CR 17-019: am. (3) (a), cr. (4) (e), (f) Register June 2018 No. 750 eff. 7-1-18; correction in (4) (f) made under s. 35.17, Stats., Register June 2018 No. 750; CR 19-141: am. (2), cr. (2m), am. (4) (intro), (b) 2., 3., (c), (d), (5) (Example) Register September 2020 No. 777, eff. 10-1-20; CR 20-081: am. (2) (b), cr. (2) (c), am. (3) (b), cr. (3) (e), (f), am. (4) (intro.), (b) to (d), r. and recr. (4) (e), r. (4) (f) Register July No. 787, eff. 8-1-21; CR 21-085: am. (5) (Example) Register August 2022 No. 800, eff. 9-1-22.

Tax 2.957(1)(1) Purpose. The purpose of this section is to prescribe the method by which the percentage of the workforce payroll of a business and the dollar amount of wages paid to such workforce moved to this state during a taxable year shall be determined for purposes of ss. 71.05 (6) (b) 47., 71.28 (9s), and 71.47 (9s), Stats.; provide examples of actions that may indicate a business has relocated to this state from another state or country; and limit the deduction provided for in s. 71.05 (6) (b) 47. am., b., and c., Stats.

Tax 2.957(2)(a)(a) “Business” means any organization or enterprise operated for profit, including a sole proprietorship, partnership, firm, business trust, joint venture, syndicate, corporation, limited liability company, or association.