Tax 14.04 NoteNote: Section 71.54 (2) (a) (intro.), Stats., was amended by 1995 Wis. Act 27, effective July 28, 1995, to reference “relief from any county under s. 59.07 (154),” Stats. (s. 59.07 (154), Stats., was renumbered s. 59.53 (21), Stats., by 1995 Wis. Act 201, effective September 1, 1996). Section 71.54 (2) (a) (intro.), Stats., was again amended, by 1995 Wis. Act 289, effective July 1, 1996, to provide for a one-twelfth reduction of property taxes accrued for months a claimant received Wisconsin works under s. 49.147 (4) or (5), Stats. Prior to the enactment of 1995 Wis. Acts 27 and 289, the county relief reference was to “general relief from any municipality or county,” and there was no reference to Wisconsin works because that program did not exist.

Tax 14.04 NoteNote: Section 71.54 (2) (a) (intro.), Stats., was amended by 1999 Wis. Act 9, effective for 2000 homestead credit claims filed in calendar year 2001 and thereafter, to require a one-twelfth reduction of property taxes accrued for months a claimant received Wisconsin works payments as a caretaker of a newborn child under s. 49.148 (1m), Stats. Under the statutes in effect immediately prior to the enactment of 1999 Wis. Act 9, the reduction was not required for receipt of those payments.

Tax 14.04 HistoryHistory: Cr. Register, February, 1990, No. 410, eff. 3-1-90; am. (2), (3) (a) to (d), (8) (b) and (9) (b), cr. (3) (e), Register, January, 1991, No. 421, eff. 2-1-91; am. (2), (3) (b), (c), (4) (a), (b) 1., 2. and (c), (8) (a), (b), (9) (a), (b), (10) (a) and (11), r. and recr. (5) and cr. (8) (c), Register, July, 2000, No. 535, eff. 8-1-00; corrections in (2), (3) (c), (e) and (4) (c) made under s. 13.93 (2m) (b) 7., Stats., Register September 2006 No. 609; CR 21-085: am. (3) (e) (Example) Register August 2022 No. 800, eff. 9-1-22.

Tax 14.05(1)(1) Purpose. This section clarifies the terms “gross rent” and “rent constituting property taxes accrued” as the terms apply to homestead credit claims.

Tax 14.05(2)(a)(a) “Gross rent” has the meaning specified in s. 71.52 (2), Stats. Gross rent includes payments by a claimant to the landlord for items normally associated with the occupancy of a homestead, such as a garage or parking space, appliances, furniture or utilities. However, payments for food, medical services or other personal services are expressly excluded under s. 71.52 (2), Stats. In situations where charges for food and services are subtracted from amounts paid to a landlord, gross rent is commonly referred to as “rent paid for occupancy.”

Tax 14.05(2)(b)(b) “Rent constituting property taxes accrued” has the meaning specified in s. 71.52 (8), Stats.

Tax 14.05(3)(a)(a) Gross rent may be claimed only for the year to which the claim relates, but it may have been paid at any time before the claim is filed.

Tax 14.05(3)(b)(b) Property taxes accrued on a claimant’s homestead not owned by the claimant or a member of the claimant’s household, which are paid by the claimant on behalf of an owner who does not reside in the homestead and who does not claim property taxes accrued under s. 71.54 (2) (c) 2., Stats., shall be considered gross rent.

Tax 14.05(3)(c)(c) Personal property taxes or mobile home parking permit fees assessed under s. 66.0435 (3) (c), Stats., paid by a claimant for a rented mobile home shall be considered gross rent. In addition, rental paid to a landlord for a mobile home or for land on which a mobile home is located shall be considered gross rent.

Tax 14.05(4)(a)(a) Except as provided in pars. (b) and (c), if a claimant claims rent constituting property taxes accrued the claimant and the landlord shall complete form I-017, “Rent Certificate,” and the claimant shall submit it with schedule H or H-EZ. The department is not precluded from requesting additional documentation to verify rent paid in cases it deems appropriate.

Tax 14.05(4)(b)(b) If a claimant pays rent for more than one homestead during a year, a separate rent certificate shall be completed for each homestead for which the claimant wishes to claim a homestead credit, and the claimant shall submit all rent certificates together with a single schedule H or H-EZ.

Tax 14.05(4)(c)(c) A landlord shall determine the reasonable value of food, medical services and other personal services such as laundry, transportation, counseling, grooming, recreational and therapeutic services provided to a claimant in addition to occupancy rights and subtract those amounts from total rent indicated on the rent certificate, to determine rent paid for occupancy. The landlord shall also indicate whether heat was included or not included in the rent by checking the appropriate box on the rent certificate.

Tax 14.05(4)(d)(d) Under s. 71.55 (2), Stats., a landlord is prohibited from charging a fee for completing the rent certificate.

Tax 14.05(4)(e)(e) If a claimant is unable to obtain a rent certificate from a landlord, proper rent receipts, money order receipts, cancelled checks or cancelled share drafts substantiating amounts paid shall be acceptable evidence of gross rent paid. The claimant shall also include a rent certificate on which all lines except the signature line have been filled in, or a statement providing the same information as that requested on the rent certificate. The statement or rent certificate shall indicate whether heat was included in the rent, and whether food or services as described in par. (c) were provided and if so the estimated value of the food and services provided. The statement or top portion of the rent certificate should be marked with a comment such as “Landlord Refuses to Sign.”

Tax 14.05(4)(f)(f) Proper verification of rent constituting property taxes accrued for a claimant who pays property taxes on the homestead on behalf of an owner other than the claimant shall be a copy of the property tax bill and a statement from the claimant, indicating that he or she paid the property taxes on behalf of an owner who did not reside in the homestead.

Tax 14.05(5)(a)(a) Under s. 71.54 (2) (a), Stats., rent constituting property taxes accrued shall be reduced by one-twelfth for each month or portion of a month for which the claimant received either $400 or more of county relief under s. 59.53 (21), Stats., or any amount of aid to families with dependent children, or “AFDC” under s. 49.19, Stats., Wisconsin works payments for community service jobs or transitional placements under s. 49.147 (4) or (5), Stats., or Wisconsin works payments as a caretaker of a newborn child under s. 49.148 (1m), Stats. However, rent constituting property taxes accrued need not be reduced if the assistance consists solely of foster care payments under s. 49.19 (10) (a), Stats., non-legally responsible relative, or “NLRR” AFDC payments or kinship care payments.

Tax 14.05(5)(b)(b) County relief and other cash public assistance payments that are repaid by the claimant in the same calendar year in which they are received are not considered payments for purposes of computing the one-twelfth reduction of rent constituting property taxes accrued as required by par. (a).

Tax 14.05(6)(6) Marital property agreements. Under s. 71.52 (8), Stats., a marital property agreement or unilateral statement under ch. 766, Stats., 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.

Tax 14.05(7)(7) Non-arm’s length rental. Under s. 71.55 (8), Stats., if a homestead is rented under circumstances deemed by the department to be not at arm’s length, it may determine rent constituting property taxes accrued as at arm’s length. The department may make this determination when the amount claimed is in excess of fair rental value. However, since under s. 71.52 (2), Stats., “gross rent” is limited to rental actually paid, the department may not increase the rent constituting property taxes accrued to arm’s length rental if the rent paid was at less than fair rental value.

Tax 14.05 NoteExample: A claimant files a claim with a rent certificate showing rent paid for occupancy of $7,200, or $600 per month. Investigation by the Department of Revenue discloses the rent is too high for the locality and dwelling involved, and the landlord is financially dependent on others for support and is related to the claimant. The department determines that the fair rental value of the claimant’s homestead for the year of the claim was $300 per month, or $3,600 for the year. No utilities, food or services were furnished by the landlord.

Tax 14.05(8)(a)(a) Under s. 71.53 (2) (e), Stats., no claim for homestead credit may be allowed if a claimant resided for the entire calendar year to which the claim relates in housing which was exempt from taxation under ch. 70, Stats., other than housing for which payments in lieu of taxes are made under s. 66.1201 (22), Stats., except as provided under s. 71.54 (2) (c) 2., Stats. Under s. 71.54 (2) (c) 2., Stats., if a claimant moves to tax-exempt housing, a claim for homestead credit may be allowed based upon property taxes accrued on the claimant’s former homestead under certain conditions. Those conditions are explained in s. Tax 14.04 (3) (e).

Tax 14.05(8)(b)(b) Under ss. 71.53 (2) (e) and 71.54 (2) (c) 1., Stats., if a claimant resided for part of the calendar year to which a claim for homestead credit relates, in a homestead which was either subject to taxation under ch. 70, Stats., or exempt from taxation under ch. 70, Stats., but for which payments in lieu of taxes were made under s. 66.1201 (22), Stats., the property taxes accrued or rent constituting property taxes accrued or both for that homestead are allowed for that portion of the year.