71.05 Annotation
Shareholder distributions derived from investments in direct obligations of the federal government are exempt under sub. (6) (b) 1. Capital Preservation v. DOR
145 Wis. 2d 841,
429 N.W.2d 551 (Ct. App. 1988).
71.05 Annotation
The fact that federal employees whose service is interrupted can repurchase prior years of employment for benefit determination purposes does not erase their absence from employment on December 31, 1963 so that they may be considered to have been employed on that date under sub. (1) (a). Hafner v. DOR,
2000 WI App 216,
239 Wis. 2d 218,
619 N.W.2d 300,
00-0511.
71.05 Annotation
Sub. (6) (a) 1. requires adding to Wisconsin income all types of interest excluded from federal interest. All distributions characterized as interest under federal tax law must be included as interest income. Borge v. Wisconsin Tax Appeals Commission,
2002 WI App 14,
250 Wis. 2d 624,
639 N.W.2d 757,
01-0488.
71.05 Annotation
When an agreement is silent on the allocation of a payment between a covenant not to compete and other claims or compensation, the commission may make a reasonable allocation if it is: 1) based on credible evidence; 2) the parties intended a portion of the payment as compensation for the covenant not to compete; and 3) the payment is economically reasonable. Schwartz v. DOR,
2002 WI App 255,
258 Wis. 2d 112,
653 N.W.2d 150,
02-0372.
71.05 Annotation
Under sub. (1) (a), if one was a member of one of the listed funds on December 31, 1963, retirement benefits paid on that person's behalf may not be exempt. Withdrawal of contributions terminated membership and the purchase of previously forfeited years of service did not reinstate the account as of December 31, 1963. Kamps v. DOR,
2003 WI App 106,
264 Wis. 2d 794,
663 N.W.2d 306,
02-2355.
71.05 Annotation
Sub. (6) (b) 5. requires that there must be a recovery of a federal itemized deduction, for which no tax benefit was received for Wisconsin purposes. The tax benefit rule means that if an amount deducted from gross income in one taxable year is recoverable in a later year, the recovery is income in the later year. Dettwiler v. Wisconsin Department of Revenue,
2007 WI App 125,
301 Wis. 2d 512,
731 N.W.2d 663,
06-1660.
71.05 Annotation
Adoption Assistance Offers Tax Relief. Franklin. Wis. Law. Feb. 1998.
71.06
71.06
Rates of taxation. 71.06(1)(1)
Fiduciaries, single individuals and heads of households; 1986 to 1997. The tax to be assessed, levied and collected upon the taxable incomes of all fiduciaries, except fiduciaries of nuclear decommissioning trust or reserve funds, and single individuals for taxable years beginning on or after August 1, 1986, and before January 1, 1994, and upon the taxable incomes of all fiduciaries, except fiduciaries of nuclear decommissioning trust or reserve funds, and single individuals and heads of households for taxable years beginning after December 31, 1993, and before January 1, 1998, shall be computed at the following rates:
71.06(1)(a)
(a) On all taxable income from $0 to $7,500, 4.9%.
71.06(1)(b)
(b) On all taxable income exceeding $7,500 but not exceeding $15,000, 6.55%.
71.06(1)(c)
(c) On all taxable income exceeding $15,000, 6.93%.
71.06(1m)
(1m) Fiduciaries, single individuals and heads of households; 1997 to 1999. The tax to be assessed, levied and collected upon the taxable incomes of all fiduciaries, except fiduciaries of nuclear decommissioning trust or reserve funds, and single individuals and heads of households shall be computed at the following rates for taxable years beginning after December 31, 1997, and before January 1, 2000:
71.06(1m)(a)
(a) On all taxable income from $0 to $7,500, 4.77%.
71.06(1m)(b)
(b) On all taxable income exceeding $7,500 but not exceeding $15,000, 6.37%.
71.06(1m)(c)
(c) On all taxable income exceeding $15,000, 6.77%.
71.06(1n)
(1n) Fiduciaries, single individuals and heads of households; 2000. The tax to be assessed, levied and collected upon the taxable incomes of all fiduciaries, except fiduciaries of nuclear decommissioning trust or reserve funds, and single individuals and heads of households shall be computed at the following rates for taxable years beginning after December 31, 1999, and before January 1, 2001:
71.06(1n)(a)
(a) On all taxable income from $0 to $7,500, 4.73%.
71.06(1n)(b)
(b) On all taxable income exceeding $7,500 but not exceeding $15,000, 6.33%.
71.06(1n)(c)
(c) On all taxable income exceeding $15,000 but not exceeding $112,500, 6.55%.
71.06(1n)(d)
(d) On all taxable income exceeding $112,500, 6.75%.
71.06(1p)
(1p) Fiduciaries, single individuals and heads of households; after 2000. The tax to be assessed, levied and collected upon the taxable incomes of all fiduciaries, except fiduciaries of nuclear decommissioning trust or reserve funds, and single individuals and heads of households shall be computed at the following rates for taxable years beginning after December 31, 2000:
71.06(1p)(a)
(a) On all taxable income from $0 to $7,500, 4.6%.
71.06(1p)(b)
(b) On all taxable income exceeding $7,500 but not exceeding $15,000, 6.15%.
71.06(1p)(c)
(c) On all taxable income exceeding $15,000 but not exceeding $112,500, 6.5%.
71.06(1p)(d)
(d) On all taxable income exceeding $112,500 but not exceeding $225,000, 6.75%.
71.06(1p)(e)
(e) On all taxable income exceeding $225,000, 7.75 percent.
71.06(2)
(2) Married persons. The tax to be assessed, levied and collected upon the taxable incomes of all married persons shall be computed at the following rates:
71.06(2)(a)
(a) For joint returns, for taxable years beginning after July 31, 1986, and before January 1, 1998:
71.06(2)(a)2.
2. On all taxable income exceeding $10,000 but not exceeding $20,000, 6.55%.
71.06(2)(b)
(b) For married persons filing separately, for taxable years beginning after July 31, 1986, and before January 1, 1998:
71.06(2)(b)2.
2. On all taxable income exceeding $5,000 but not exceeding $10,000, 6.55%.
71.06(2)(c)
(c) For joint returns, for taxable years beginning after December 31, 1997, and before January 1, 2000:
71.06(2)(c)1.
1. On all taxable income from $0 to $10,000, 4.77%.
71.06(2)(c)2.
2. On all taxable income exceeding $10,000 but not exceeding $20,000, 6.37%.
71.06(2)(d)
(d) For married persons filing separately, for taxable years beginning after December 31, 1997, and before January 1, 2000:
71.06(2)(d)2.
2. On all taxable income exceeding $5,000 but not exceeding $10,000, 6.37%.
71.06(2)(e)
(e) For joint returns, for taxable years beginning after December 31, 1999, and before January 1, 2001:
71.06(2)(e)1.
1. On all taxable income from $0 to $10,000, 4.73%.
71.06(2)(e)2.
2. On all taxable income exceeding $10,000 but not exceeding $20,000, 6.33%.
71.06(2)(e)3.
3. On all taxable income exceeding $20,000 but not exceeding $150,000, 6.55%.
71.06(2)(e)4.
4. On all taxable income exceeding $150,000, 6.75%.
71.06(2)(f)
(f) For married persons filing separately, for taxable years beginning after December 31, 1999, and before January 1, 2001:
71.06(2)(f)2.
2. On all taxable income exceeding $5,000 but not exceeding $10,000, 6.33%.
71.06(2)(f)3.
3. On all taxable income exceeding $10,000 but not exceeding $75,000, 6.55%.
71.06(2)(g)
(g) For joint returns, for taxable years beginning after December 31, 2000:
71.06(2)(g)2.
2. On all taxable income exceeding $10,000 but not exceeding $20,000, 6.15%.
71.06(2)(g)3.
3. On all taxable income exceeding $20,000 but not exceeding $150,000, 6.5%.
71.06(2)(g)4.
4. On all taxable income exceeding $150,000 but not exceeding $300,000, 6.75%.
71.06(2)(g)5.
5. On all taxable income exceeding $300,000, 7.75 percent.
71.06(2)(h)
(h) For married persons filing separately, for taxable years beginning after December 31, 2000:
71.06(2)(h)2.
2. On all taxable income exceeding $5,000 but not exceeding $10,000, 6.15%.
71.06(2)(h)3.
3. On all taxable income exceeding $10,000 but not exceeding $75,000, 6.5%.
71.06(2)(h)4.
4. On all taxable income exceeding $75,000 but not exceeding $150,000, 6.75%.
71.06(2)(h)5.
5. On all taxable income exceeding $150,000, 7.75 percent.
71.06(2e)(a)(a) For taxable years beginning after December 31, 1998, and before January 1, 2000, the maximum dollar amount in each tax bracket, and the corresponding minimum dollar amount in the next bracket, under
subs. (1m) and
(2) (c) and
(d), and for taxable years beginning after December 31, 1999, the maximum dollar amount in each tax bracket, and the corresponding minimum dollar amount in the next bracket, under
subs. (1n),
(1p) (a) to
(c), and
(2) (e),
(f),
(g) 1. to
3., and
(h) 1. to
3., shall be increased each year by a percentage equal to the percentage change between the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August of the previous year and the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August 1997, as determined by the federal department of labor, except that for taxable years beginning after December 31, 2000, and before January 1, 2002, the dollar amount in the top bracket under
subs. (1p) (c) and
(d),
(2) (g) 3. and
4. and
(h) 3. and
4. shall be increased by a percentage equal to the percentage change between the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August of the previous year and the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August 1999, as determined by the federal department of labor, except that for taxable years beginning after December 31, 2011, the adjustment may occur only if the resulting amount is greater than the corresponding amount that was calculated for the previous year. Each amount that is revised under this paragraph shall be rounded to the nearest multiple of $10 if the revised amount is not a multiple of $10 or, if the revised amount is a multiple of $5, such an amount shall be increased to the next higher multiple of $10. The department of revenue shall annually adjust the changes in dollar amounts required under this paragraph and incorporate the changes into the income tax forms and instructions.
71.06(2e)(b)
(b) For taxable years beginning after December 31, 2009, the maximum dollar amount in each tax bracket, and the corresponding minimum dollar amount in the next bracket, under
subs. (1p) (d) and
(2) (g) 4. and
(h) 4., and the dollar amount in the top bracket under
subs. (1p) (e) and
(2) (g) 5. and
(h) 5., shall be increased each year by a percentage equal to the percentage change between the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August of the previous year and the U.S. consumer price index for all urban consumers, U.S. city average, for the month of August 2008, as determined by the federal department of labor, except that for taxable years beginning after December 31, 2011, the adjustment may occur only if the resulting amount is greater than the corresponding amount that was calculated for the previous year. Each amount that is revised under this paragraph shall be rounded to the nearest multiple of $10 if the revised amount is not a multiple of $10 or, if the revised amount is a multiple of $5, such an amount shall be increased to the next higher multiple of $10. The department of revenue shall annually adjust the changes in dollar amounts required under this paragraph and incorporate the changes into the income tax forms and instructions.
71.06(2m)
(2m) Rate changes. If a rate under
sub. (1),
(1m),
(1n),
(1p) or
(2) changes during a taxable year, the taxpayer shall compute the tax for that taxable year by the methods applicable to the federal income tax under section
15 of the internal revenue code.
71.06(2s)
(2s) Nonresidents and part-year residents. 71.06(2s)(a)(a) For taxable years beginning after December 31, 1996, and before January 1, 1998, with respect to nonresident individuals, including individuals changing their domicile into or from this state, the tax brackets under
subs. (1) and
(2) shall be multiplied by a fraction, the numerator of which is Wisconsin adjusted gross income and the denominator of which is federal adjusted gross income. In this paragraph, for married persons filing separately "adjusted gross income" means the separate adjusted gross income of each spouse, and for married persons filing jointly "adjusted gross income" means the total adjusted gross income of both spouses. If an individual and that individual's spouse are not both domiciled in this state during the entire taxable year, the tax brackets under
subs. (1) and
(2) on a joint return shall be multiplied by a fraction, the numerator of which is their joint Wisconsin adjusted gross income and the denominator of which is their joint federal adjusted gross income.
71.06(2s)(b)
(b) For taxable years beginning after December 31, 1997, and before January 1, 2000, with respect to nonresident individuals, including individuals changing their domicile into or from this state, the tax brackets under
subs. (1m) and
(2) (c) and
(d) shall be multiplied by a fraction, the numerator of which is Wisconsin adjusted gross income and the denominator of which is federal adjusted gross income. In this paragraph, for married persons filing separately "adjusted gross income" means the separate adjusted gross income of each spouse, and for married persons filing jointly "adjusted gross income" means the total adjusted gross income of both spouses. If an individual and that individual's spouse are not both domiciled in this state during the entire taxable year, the tax brackets under
subs. (1m) and
(2) (c) and
(d) on a joint return shall be multiplied by a fraction, the numerator of which is their joint Wisconsin adjusted gross income and the denominator of which is their joint federal adjusted gross income.
71.06(2s)(c)
(c) For taxable years beginning after December 31, 1999, and before January 1, 2001, with respect to nonresident individuals, including individuals changing their domicile into or from this state, the tax brackets under
subs. (1n) and
(2) (e) and
(f) shall be multiplied by a fraction, the numerator of which is Wisconsin adjusted gross income and the denominator of which is federal adjusted gross income. In this paragraph, for married persons filing separately "adjusted gross income" means the separate adjusted gross income of each spouse, and for married persons filing jointly "adjusted gross income" means the total adjusted gross income of both spouses. If an individual and that individual's spouse are not both domiciled in this state during the entire taxable year, the tax brackets under
subs. (1n) and
(2) (e) and
(f) on a joint return shall be multiplied by a fraction, the numerator of which is their joint Wisconsin adjusted gross income and the denominator of which is their joint federal adjusted gross income.
71.06(2s)(d)
(d) For taxable years beginning after December 31, 2000, with respect to nonresident individuals, including individuals changing their domicile into or from this state, the tax brackets under
subs. (1p) and
(2) (g) and
(h) shall be multiplied by a fraction, the numerator of which is Wisconsin adjusted gross income and the denominator of which is federal adjusted gross income. In this paragraph, for married persons filing separately "adjusted gross income" means the separate adjusted gross income of each spouse, and for married persons filing jointly "adjusted gross income" means the total adjusted gross income of both spouses. If an individual and that individual's spouse are not both domiciled in this state during the entire taxable year, the tax brackets under
subs. (1p) and
(2) (g) and
(h) on a joint return shall be multiplied by a fraction, the numerator of which is their joint Wisconsin adjusted gross income and the denominator of which is their joint federal adjusted gross income.
71.06(3)
(3) Tax table. The secretary of revenue shall prepare a table from which the tax in effect on taxable personal income shall be determined. Such table shall be published in the department's appropriate instructional booklets. The form and the tax computations of the table shall be substantially as follows:
71.06(3)(a)
(a) The title thereof shall be "Tax Table".
71.06(3)(b)
(b) The first 2 columns shall contain the minimum and the maximum amounts, respectively, of taxable income in brackets of not more than $100. Computation of tax on taxable income in excess of the amount shown on the table may be set forth at the foot of such table.
71.06(3)(c)
(c) The 3rd column shall show the amount of the tax payable for each bracket before the allowance of any credit. The tax shall be computed at the rates in effect, which rates shall be applied to the amount of income at the middle of each bracket. The amount of tax for each bracket shall be computed to the nearest dollar.
71.07(1)(1)
Claim of right credit. Any natural person may credit against taxes otherwise due under this chapter the decrease in tax under this chapter for the prior taxable year that would be attributable to subtracting income taxed for that year under the claim of right doctrine but repaid, as calculated under section
1341 of the internal revenue code, if the income repaid is greater than $3,000 and the amount is not subtracted in computing Wisconsin adjusted gross income or used in computing the credit under
sub. (5) (a). If the allowable amount of the claim exceeds the claimant's taxes due under this chapter the amount of the claim not used to offset those taxes shall be certified to the department of administration for payment to the claimant by check, share draft or other draft drawn on the general fund.
71.07(2)
(2) Community development finance authority credit. Any individual receiving a credit under s.
71.09 (12m), 1985 stats., may carry forward to the next succeeding 15 taxable years the amount of the credit not offset against taxes for the year of purchase to the extent not offset by those taxes otherwise due in all intervening years between the year for which the credit was computed and the year for which the carry-forward is claimed.
71.07(2dd)
(2dd) Development zones day care credit. 71.07(2dd)(a)1.
1. "Day care center benefits" means benefits provided at a child care facility that is licensed under
s. 48.65 or
48.69 and that for compensation provides care for at least 6 children or benefits provided at a facility for persons who are physically or mentally incapable of caring for themselves.
71.07(2dd)(a)2.
2. "Employment-related day care expenses" means amounts paid or incurred by a claimant, during the 2-year period beginning with the day that the member of the targeted group begins work for the claimant, for providing or making day care center benefits available to a qualifying individual in order to enable a member of a targeted group to be employed by the claimant.
71.07(2dd)(a)5.
5. "Qualifying individual" means a dependent of a member of a targeted group who is employed by a claimant and with respect to whom the member is entitled to a deduction under section
151 (c) of the internal revenue code for federal income tax purposes, a dependent of a member of a targeted group who is employed by a claimant if the dependent is physically or mentally incapable of caring for himself or herself or the spouse of a member of a targeted group who is employed by the claimant if the spouse is physically or mentally incapable of caring for himself or herself.
