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Tax 14.03 Tax 14.03 Household income and income.
Tax 14.03(1) (1)Purpose. This section clarifies the meaning of"household income" and "income" includable in household income as the terms apply to homestead credit claims.
Tax 14.03(2) (2)Definitions. In this section:
Tax 14.03(2)(a) (a) "Household income" has the meaning specified in s. 71.52 (5), Stats.
Tax 14.03(2)(b) (b) "Income" has the meaning specified in s. 71.52 (6), Stats.
Tax 14.03(3) (3)Deduction for dependents.
Tax 14.03(3)(a)(a) Under s. 71.52 (5), Stats., a deduction of $250 is allowed for each of the claimant's dependents, as defined in s. 152 of the internal revenue code, who have the same principal abode as the claimant for more than 6 months during the calendar year to which a claim for homestead credit relates. A claimant may multiply the number of dependents with the same principal abode for more than 6 months by $250 and subtract the result from the total of the income items to arrive at household income.
Tax 14.03 Note Example: A claimant and the claimant's spouse claim 3 dependents on their 1997 federal income tax return, and all 3 dependents have the same principal abode as the claimant for the entire year. Household income items include Wisconsin adjusted gross income of $10,500, depreciation of $1,500 and unemployment insurance of $500.
Tax 14.03 Note Total household income is $11,750, consisting of the total of the income items listed, $12,500, minus the dependent deduction of $750, which is $250 times 3 dependents.
Tax 14.03(3)(b) (b) A dependent is considered to have the same principal abode as the claimant during temporary absences from the claimant's homestead for reasons such as school attendance, illness, vacations, business commitments or military service.
Tax 14.03(3)(c) (c) In the following situations, a dependent who does not have the same principal abode as the claimant for more than 6 months during the calendar year to which a claim for homestead credit relates is nonetheless considered to have the same principal abode for more than 6 months if during that year:
Tax 14.03(3)(c)1. 1. The dependent is born or dies, and the dependent has the same principal abode as the claimant during the entire time the dependent is alive during that year.
Tax 14.03(3)(c)2. 2. The dependent is adopted by the claimant, is placed with the claimant for adoption or becomes the stepchild of the claimant, and the dependent has the same principal abode as the claimant from that time to the end of that calendar year.
Tax 14.03(4) (4)Items includable in income. Under s. 71.52 (6), Stats., income includes the sum of:
Tax 14.03(4)(a) (a) "Wisconsin adjusted gross income" as defined in s. 71.01 (13), Stats., for the calendar year to which a claim for homestead credit relates.
Tax 14.03(4)(b) (b) The following amounts to the extent not included in Wisconsin adjusted gross income:
Tax 14.03(4)(b)1. 1. Maintenance payments, not including foster care maintenance and supplemental payments excludable under s. 131 of the internal revenue code.
Tax 14.03(4)(b)2. 2. Court-ordered support payments, including support for dependents under ch. 49, Stats.
Tax 14.03(4)(b)3. 3. Cash public assistance and county relief, including the following:
Tax 14.03(4)(b)3.a. a. Aid to families with dependent children, or "AFDC."
Tax 14.03(4)(b)3.b. b. Wisconsin works, or "W-2" payments.
Tax 14.03(4)(b)3.c. c. Non-legally responsible relative, or "NLRR" AFDC payments or kinship care payments under s. 48.57, Stats. These are payments received as a relative other than a parent, for caring for a dependent child in the claimant's homestead.
Tax 14.03(4)(b)3.d. d. Cash benefits paid by counties under s. 59.53 (21), Stats.
Tax 14.03(4)(b)3.e. e. Reimbursement from a governmental agency for amounts originally paid for by the recipient, not including cash reimbursements for home energy assistance or for services under Title XX of the federal social security act and community options program, or "COP" payments under s. 46.27, Stats.
Tax 14.03(4)(b)3.f. f. Adoption assistance payments under Title IV-E of the federal social security act or from another state, or payments by the Wisconsin department of children and families under s. 48.975, Stats., to adoptive parents of children having special needs as described in s. DCF 50.03 (1) (b).
Tax 14.03(4)(b)3.g. g. Veterans administration payments for reimbursement of services purchased by the recipient.
Tax 14.03(4)(b)3.h. h. Federal housing and urban development, or "H.U.D." payments for housing.
Tax 14.03(4)(b)3.i. i. Disaster relief grants under the federal disaster relief act of 1974.
Tax 14.03(4)(b)4. 4. The gross amount of a pension or annuity, including:
Tax 14.03(4)(b)4.a. a. Railroad retirement benefits.
Tax 14.03(4)(b)4.b. b. Veterans' disability pensions.
Tax 14.03(4)(b)4.c. c. Any amounts withheld by the payor.
Tax 14.03(4)(b)4.d. d. Nontaxable recoveries of cost.
Tax 14.03(4)(b)4.e. e. Disability income exclusions from taxable income.
Tax 14.03 Note Example: Gross amount of a pension. A claimant was entitled to a pension of $8,000 during the year but received only $5,600 after $2,400 was withheld by the payor for payment of health insurance premiums for the claimant. Of the $8,000 pension, $2,000 was a return of the claimant's contribution.
Tax 14.03 Note The gross pension of $8,000 must be included in income.
Tax 14.03(4)(b)5. 5. Except as provided in subd. 3. e., all payments received for the benefit of a claimant or a member of the claimant's household under the federal social security act, including:
Tax 14.03(4)(b)5.a. a. All federal social security retirement, disability or survivorship benefits.
Tax 14.03(4)(b)5.b. b. Lump sum death benefits.
Tax 14.03(4)(b)5.c. c. Medicare premiums deducted from social security benefits received by all members of a household.
Tax 14.03(4)(b)5.d. d. Supplemental security income, or "SSI" benefits received by persons over 65 years of age, or blind or disabled.
Tax 14.03(4)(b)5.e. e. Supplemental security income - exceptional needs, or "SSI-E" payments under s. 49.77 (3s), Stats.
Tax 14.03(4)(b)6. 6. Compensation and other cash benefits received from the United States for past or present service in the armed forces.
Tax 14.03(4)(b)7. 7. Payments made to surviving widows, widowers or parents of veterans by the United States, but not including insurance proceeds received by beneficiaries of National Service Life Insurance.
Tax 14.03(4)(b)8. 8. Proceeds from a personal endowment insurance policy or annuity contract purchased by the recipient.
Tax 14.03(4)(b)9. 9. The gross amount of "loss of time" insurance proceeds.
Tax 14.03(4)(b)10. 10. Nontaxable interest received from the federal government or any of its instrumentalities, or from state or municipal bonds.
Tax 14.03(4)(b)11. 11. Scholarship and fellowship gifts or income and other educational grants, not including student loans.
Tax 14.03(4)(b)12. 12. Unemployment insurance, including railroad unemployment compensation.
Tax 14.03(4)(b)13. 13. Workers' compensation.
Tax 14.03(4)(b)14. 14. Capital gains not included in Wisconsin adjusted gross income, but not including a nonrecognized gain from an involuntary conversion under s. 1033 of the internal revenue code.
Tax 14.03(4)(b)15. 15. A gain on the sale of a personal residence excluded under s. 121 of the internal revenue code. A gain on the sale of a personal residence which would be reportable under the installment sale method if taxable may be reported either in full in the year of sale or each year as payments are received.
Tax 14.03(4)(b)16. 16. Dividends not included in Wisconsin adjusted gross income.
Tax 14.03(4)(b)17. 17. Income of a nonresident or part-year resident married to a full-year resident of Wisconsin.
Tax 14.03(4)(b)18. 18. A housing allowance provided to a member of the clergy.
Tax 14.03(4)(b)19. 19. The amount by which a resident manager's rent is reduced.
Tax 14.03(4)(b)20. 20. Income of a Native American which is nontaxable under ch. 71, Stats.
Tax 14.03(4)(b)21. 21. Income from sources outside of Wisconsin which is nontaxable under ch. 71, Stats.
Tax 14.03(4)(b)22. 22. Nontaxable deferred compensation.
Tax 14.03(4)(b)23. 23. The following items deducted in determining Wisconsin adjusted gross income, including items deducted in arriving at partnership and tax-option "S" corporation income or losses reported as a part of Wisconsin adjusted gross income:
Tax 14.03(4)(b)23.a. a. Intangible drilling costs.
Tax 14.03(4)(b)23.b. b. Depletion allowances.
Tax 14.03(4)(b)23.c. c. Depreciation, including that portion of the standard mileage rate which is determined under the internal revenue code to be depreciation.
Tax 14.03(4)(b)23.d. d. Expenses deducted under s. 179 of the internal revenue code, regarding the election to expense certain depreciable business assets.
Tax 14.03(4)(b)23.e. e. Amortization.
Tax 14.03(4)(b)23.f. f. Contributions to individual retirement accounts under s. 219 of the internal revenue code, including contributions to individual retirement arrangements, or "IRA's," and simplified employee pension plans, or "SEP's."
Tax 14.03(4)(b)23.g. g. Contributions to Keogh plans.
Tax 14.03(4)(b)23.h. h. Net operating loss carryforwards.
Tax 14.03(4)(b)23.i. i. Capital loss carryforwards.
Tax 14.03(4)(c) (c) The following items deducted in determining Wisconsin adjusted gross income, including items deducted in arriving at partnership, limited liability company and tax-option "S" corporation income or losses reported as a part of Wisconsin adjusted gross income:
Tax 14.03(4)(c)1. 1. Intangible drilling costs.
Tax 14.03(4)(c)2. 2. Depletion allowances.
Tax 14.03(4)(c)3. 3. Depreciation, including that portion of the standard mileage rate which is determined under the internal revenue code to be depreciation.
Tax 14.03(4)(c)4. 4. Expenses deducted under s. 179 of the internal revenue code, regarding the election to expense certain depreciable business assets.
Tax 14.03(4)(c)5. 5. Amortization.
Tax 14.03(4)(c)6. 6. Contributions to individual retirement accounts under s. 219 of the internal revenue code, including contributions to individual retirement arrangements, or "IRAs," savings incentive match plans for employees, or "SIMPLEs" and simplified employee pension plans, or "SEPs."
Tax 14.03(4)(c)7. 7. Contributions to Keogh plans.
Tax 14.03(4)(c)8. 8. Net operating loss carryforwards.
Tax 14.03(4)(c)9. 9. Capital loss carryforwards.
Tax 14.03(5) (5)Exclusions from income.
Tax 14.03(5)(a)(a) Under s. 71.52 (6), Stats., income does not include the following:
Tax 14.03(5)(a)1. 1. Amounts described in sub. (4) (b) 1., 3. e., 7., 11. and 14. as not being includable.
Tax 14.03(5)(a)2. 2. Gifts from natural persons, including voluntary support payments.
Tax 14.03(5)(a)3. 3. Relief in kind by a governmental agency, including surplus food, food stamps and payments directly to a supplier of goods or services, such as medical care, food, clothing and residential energy.
Tax 14.03(5)(a)4. 4. The nontaxable portions of lump sum insurance proceeds received:
Tax 14.03(5)(a)4.a. a. For a recipient's disability or loss of limb.
Tax 14.03(5)(a)4.b. b. By a beneficiary of a decedent's life insurance policy.
Tax 14.03(5)(a)4.c. c. From the surrender of any portion of an insurance policy that does not constitute a personal endowment insurance policy or an annuity contract purchased by the recipient.
Tax 14.03(5)(a)5. 5. Wisconsin homestead credit amounts received.
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