Tax 14.03(4)(b)20. is revised, to update terminology relating to Native Americans.
SECTION 18. Tax 14.03(4)(b)23.(intro.) and a. to i. are renumbered Tax 14.03(4)(c)(intro.) and 1. to 9., to list items deducted in determining Wisconsin adjusted gross income in a separate paragraph. As renumbered, Tax 14.03(4)(c)(intro.) is revised, to add a reference to items deducted in determining limited liability company income or losses, and Tax 14.03(4)(c)6. is revised, to add a reference to contributions to SIMPLEs and to conform punctuation to Clearinghouse standards.
SECTION 19. Tax 14.03(5) is repealed and recreated, to clarify provisions relating to exclusions from income and list additional items that constitute exclusions from income. This includes previously reported scholarship income, pursuant to the amendment of s. 71.52(6), Stats., by 1997 Wis. Act 27.
SECTION 20. Tax 14.04(2) is revised, to remove obsolete language relating to general property tax relief.
Tax 14.04(3)(b) and (c) are revised, to clarify various provisions relating to property taxes accrued.
Tax 14.04(4)(a) is revised, to remove obsolete provisions relating to verification of property taxes accrued.
Tax 14.04(4)(b)1. and 2. are revised, to conform punctuation to Clearinghouse standards.
Tax 14.04(4)(c) is revised, to clarify a provision relating to ownership of a mobile home and to conform language to Clearinghouse standards.
SECTION 21. Tax 14.04(5) is repealed and recreated, to update provisions relating to the reduction of property taxes accrued when certain public assistance payments are received.
SECTIONS 22 AND 23. Tax 14.04(8)(a) and (b) are revised and Tax 14.04(8)(c) is created, to clarify various provisions relating to allowable property taxes for a co-owned homestead.
SECTION 24. Tax 14.04(9)(a) and (b), (10)(a) and (11) are revised, to clarify various provisions relating to property taxes accrued and to conform language and punctuation to Clearinghouse standards.
SECTION 25. Tax 14.05(2) is repealed and recreated, to replace quoted statutory language relating to definitions with references to the statutes, and to provide that certain separate payments to a landlord are considered gross rent.
SECTIONS 26, 27,31, 32 AND 33. Tax 14.05(3)(b) is repealed and Tax 14.05(13)(a) is created, to place a provision regarding indirect rent payments by a governmental agency in a subsection relating to low-income housing.
As a result of the repeal of Tax 14.05(3)(b), Tax 14.05(3)(c) and (d) are renumbered Tax 14.05(3)(b) and (c). As renumbered, Tax 14.05(3)(b) is revised, to clarify a provision relating to property taxes for a homestead not owned by the claimant.
Due to the creation of new Tax 14.05(13)(a), the existing Tax 14.05(13)(a)(intro.) and (b) are renumbered Tax 14.05(13)(b) and (c). Tax 14.05(13)(a)1., 2. and 3. are repealed and Tax 14.05(13)(b) as renumbered is revised, to clarify a provision relating to computing rent paid for occupancy when subsidy payments from a governmental agency are received by the landlord.
SECTION 28. Tax 14.05(4)(a) is revised, to conform language to Clearinghouse standards.
Tax 14.05(4)(b) is revised, to clarify a provision relating to paying rent for more than one homestead during the year.
Tax 14.05(4)(c) is revised, to update procedures relating to preparing a rent certificate, and to conform language and punctuation to Clearinghouse standards.
Tax 14.05(4)(e) is revised, to update procedures relating to preparing a rent certificate when one cannot be obtained from the landlord.
SECTION 29. Tax 14.05(5) is repealed and recreated, to update provisions relating to the reduction of rent constituting property taxes accrued when certain public assistance payments are received.
SECTION 30. Tax 14.05(7) is revised, to replace quoted statutory language relating to non-arms length rental with explanatory language.
Tax 14.05(8)(a) and (d)(intro.) and 1. to 3., (12) and (13)(title) are revised, to conform language and punctuation to Clearinghouse standards.
Tax 14.05(8)(b) is revised, to reference s. 71.53(2)(e), Stats., to reflect the department's position that the paragraph also interprets that statute.
Tax 14.05(8)(c) is revised, to reflect the department's position that par. (c) applies to both par. (a) and par (b).
Tax 14.05(9)(a) is revised, to clarify a provision relating to joint occupancy of a rental unit.
SECTION 34. Tax 14.05(14)(a)1. is revised, effective with rent paid for calendar year 2000, to increase the “standard rate" for rent paid for occupancy by residents of nursing homes or long-term care facilities from $40 per week to $100 per week. This rate more accurately reflects the portion of payments to those types of facilities that constitutes rent paid for occupancy. It also more closely approximates the rent paid for occupancy as computed using the other department-approved method, the “percentage of building occupancy expenses" method. The standard rate has not been changed since March 1990.
Tax 14.05(14)(a)2. is revised, to include substantive material from an example, relating to the “percentage of building occupancy expenses" method of computing rent paid for occupancy by residents of nursing homes or long-term care facilities.
SECTIONS 35 AND 36. Tax 14.05(14)(b) is renumbered Tax 14.05(14)(b)1. and Tax 14.05(14)(b)2. is created, to clarify that a nursing home resident who received medical assistance during the year but is no longer receiving the assistance may be eligible to claim a homestead credit.
SECTION 37. Tax 14.06(title), (1) and (3)(c)(intro.) are revised, to conform punctuation to Clearinghouse standards.
Text of Rule
SECTION 1. Tax 14.01(1) and (2)(intro.) are amended to read:
Tax 14.01(1) PURPOSE. This section describes the Wisconsin homestead credit, defines terms, and sets forth administrative provisions applicable to all sections of ch. Tax 14 this chapter.
(2)(intro.) DEFINITIONS. In ch. Tax 14
this chapter and in ss. 71.51 through to 71.55, Stats.:
Note to Revisor: Remove the statutory references following the titles to each section, Tax 14.01 to 14.06.
SECTION 2. Tax 14.01(2)(a), (b), (c) and (d) are renumbered Tax 14.01(2)(b), (c), (d) and (a) and as renumbered Tax 14.01(2)(a) and (b) are amended to read:
Tax 14.01(2)(a) “General County relief" means a basic assistance program provided by a county under
ch. 49 s. 59.53(21), Stats., to an eligible dependent person. General
County relief is a separate program in itself and, 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.
(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.
SECTION 3. Tax 14.01(3)(a) and (4) are amended to read:
Tax 14.01(3)(a) Sections 71.51 through 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.
(4) HOW TO FILE. (a) A homestead credit claim shall be filed on Schedule schedule H, titled “Wisconsin Homestead Credit Claim," and filed with the Wisconsin department
of revenue at the location described in the instructions to Schedule
schedule H.
(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 schedule H to the income tax return. If the claimant has previously filed the income tax return, the preferable or is filing an income tax return separately from the schedule H, the preferred procedure for filing a homestead credit claim is to file a duplicate copy of the income tax return with Schedule H, schedule H and to write the words “Duplicate" on the top of the first page of the tax return copy and “Income Tax Return
Previously Separately Filed" on the top of Schedule H, and to fill in the date the income tax return was filed in the space provided on Schedule schedule H.
(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 schedule H without attaching it to a return.
SECTION 4. Tax 14.01(5)(a) is renumbered Tax 14.01(5)(a)(intro.) and amended to read:
Tax 14.01(5)(a)(intro.) Under s. 71.53(2)
s. 71.53(2)(a), Stats., an original homestead credit claim shall be filed with the department on or before December 31 of the year following the year to which the claim relates 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:
SECTION 5. Tax 14.01(5)(a)1. and 2. are created to read:
Tax 14.01(5)(a)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.
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.
Example: A 1998 homestead credit claim filed for the calendar year ending December 31, 1998, must be filed by April 15, 2003.
SECTION 6. Tax 14.01(5)(b) and (6) are amended to read:
Tax 14.01(5)(b) Under s. 71.53(3), Stats., a A claimant who files a timely original claim may subsequently file an amended claim with the department. An Under s. 71.75(2), Stats., an amended claim shall be filed within 4 years of December 31 of the year following the year to which the claim relates the deadline for filing the original claim or the department shall disallow the claim.
Note to Revisor: Insert the following example at the end of sub. (5)(b):
Example: Claimant A, who filed a 1994 homestead credit claim on May 1, 1996, wishes to file an amended 1994 claim. The amended claim may be filed any time on or before April 15, 2003, since the deadline for filing the original 1994 claim was April 15, 1999.
(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:
(a) All information requested on the form;.
(b) Proper verification of property taxes accrued as provided in s. Tax 14.04(4), if the claimant claims property taxes accrued
;.
(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;.
(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 the a living claimant, but a homestead credit claim filed on behalf of a claimant person who is deceased at the time of filing shall be denied as provided in s. Tax 14.02(11).
SECTION 7. Tax 14.01(7) is renumbered Tax 14.01(7)(a)(intro.) and amended to read:
Tax 14.01(7)(a)(intro.) Under s. 71.74(8)(a), Stats., the The department may give notice of an incorrect homestead credit amount within 4 years from December 31 of the year following the year to which a homestead credit claim relates. 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:
SECTION 8. Tax 14.01(7)(a)1. to 4. and (b) are created to read:
Tax 14.01(7)(a)1. The “intent to defeat or evade" provision under s. 71.77(3), Stats.
2. The “extension agreement" provision under s. 71.77(5), Stats.
3. The “six-year" provision under s. 71.77(7)(a), Stats.
4. The “federal change" provisions under s. 71.77(7)(b), Stats.
(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.
Example: Claimant A timely files a 1995 claim for homestead credit and receives a homestead credit of $500. On November 1, 2001, Claimant A files an amended 1995 claim for homestead credit claiming a revised 1995 credit of $700. Upon review of the file, the department determines that Claimant A's correct homestead credit for 1995 is $300 rather than the $500 allowed on the original claim or the $700 claimed on the amended claim.
Since the amended 1995 homestead credit claim will be acted on after April 15, 2000, the last date for adjusting an original 1995 claim, the department must act on the amended claim by November 1, 2002. Prior to that date the department may notify Claimant A that no additional credit is allowable for 1995. 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.
SECTION 9. Tax 14.01(8) is amended to read:
Tax 14.01(8)(title) INTEREST AND PENALTIES ON INCORRECT CLAIMS. (a) Excessive claims. Excessive 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 as provided by s. 71.82(1)(c), Stats. The interest shall be imposed from the date on which the excessive amount was paid or credited, but not earlier than from December 31 of the year following the year to which the claim relates, to the date on which the amount when subsequently assessed will become delinquent if unpaid. If unpaid by the due date shown on the notice of adjustments to the homestead credit claim, the amount due, including interest, shall be subject to delinquent interest at the rate provided by s. 71.82(2)(a), Stats. 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.
(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.
Note to Revisor: Replace the 2 notes at the end of Tax 14.01 with the following:
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.
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.
SECTION 10. Tax 14.02(2)(c) is repealed.
Note to Revisor: 1) Insert the following note at the end of sub. (2)(b):
Note: Requests for a determination under par. (b) should be addressed to Wisconsin Department of Revenue, P.O. Box 8906, Madison, WI 53708-8906.
2) Replace the example at the end of sub. (4) with the following:
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.
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.
SECTION 11. Tax 14.02(5), (9), (10) and (11) are amended to read:
Tax 14.02(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 a the household are not allowable. The, a claimant may claim only the rent or property taxes pertaining to the principal dwelling.
Note to Revisor: Replace example 2 at the end of sub. (5) with the following:
2) A claimant moves from one apartment to another and pays rent for both apartments for a two-month period.
(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 and should be mailed to the Wisconsin Department of Revenue, Post Office Box 8906, Madison, WI 53708. A homestead credit claim filed after the withdrawal of a farmland preservation credit claim shall be filed by the normal due date deadline for filing a homestead credit claim or the department shall disallow the claim.
Note to Revisor: Replace the example at the end of sub. (9) with the following example and add the following note:
Example: A 1997 homestead credit claim filed after the withdrawal of a 1997 farmland preservation credit claim must be filed on or before April 15, 2002.
Note: A written withdrawal of a farmland preservation credit claim should be mailed to Wisconsin Department of Revenue, P.O. Box 8906, Madison, WI 53708-8906.
(10) PERSON CLAIMED AS A DEPENDENT. Under s. 71.53(2)(d), Stats., a person does not qualify for a homestead credit if the person is claimed as a dependent for federal income tax purposes during the year to which the claim relates, unless the person claiming a homestead credit is 62 years of age or older as of December 31 of the claim year. However, a person is not disqualified if the person any of the following apply:
(a) Is The person is improperly claimed as a dependent on a federal income tax return;.
