71.05(22)(f)3.
3. For taxable years beginning on or after January 1, 1994, and before January 1, 1998, in the case of a taxpayer with respect to whom a deduction under s.
71.07 (8) is allowable to another person, the Wisconsin standard deduction shall be $500 adjusted for inflation in the manner prescribed by sections
1 (f) (3) to (6) and
63 (c) (4) of the Internal Revenue Code. The department of revenue shall incorporate the changes in the income tax forms and instructions.
71.05(22)(f)4.a.a. For taxable years beginning after December 31, 1997, in the case of a taxpayer with respect to whom an exemption under sub.
(23) (b) 2. is allowable to another person, the Wisconsin standard deduction shall be the lesser of the amount under subd.
4. b. or one of the amounts calculated under subd.
4. c., whichever amount under subd.
4. c. is greater.
71.05(22)(f)4.b.
b. The standard deduction that may be claimed by an individual under par.
(dm) or
(dp), based on the individual's filing status.
71.05(22)(f)4.c.
c. $500, as adjusted for inflation in the manner prescribed by sections
1 (f) (3) to (6) and
63 (c) (4) of the Internal Revenue Code or the taxpayer's earned income, as defined in section
911 (d) (2) of the Internal Revenue Code, plus $250, as adjusted for inflation in the manner prescribed by sections
1 (f) (3) to (6) and
63 (c) (4) of the Internal Revenue Code.
71.05(22)(f)4.d.
d. The department shall incorporate the changes in this subdivision in the income tax forms and instructions.
71.05(22)(g)
(g)
Nonresidents. With respect to nonresident natural persons deriving income from property located, business transacted or personal or professional services performed in this state, including natural persons changing their domicile into or from this state, the Wisconsin standard deduction and itemized deductions are based on federal adjusted gross income, and as provided in par.
(f) 4., and are limited by such fraction of that amount as Wisconsin adjusted gross income is of 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.
71.05(22)(h)
(h)
Part-year residents. If a person and that person's spouse are not both domiciled in this state during the entire taxable year, the Wisconsin standard deduction or itemized deduction on a joint return is determined by multiplying the Wisconsin standard deduction or itemized deduction, each calculated on the basis of federal adjusted gross income, and as provided in par.
(f) 4., 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. For a married person who is not domiciled in this state for the entire taxable year and who files a separate return, the Wisconsin standard deduction and itemized deduction are determined under par.
(g).
71.05(23)
(23) Personal exemptions. In computing Wisconsin taxable income, an individual taxpayer may subtract the following amounts:
71.05(23)(a)
(a) For taxable years that begin after December 31, 1999, and before January 1, 2001:
71.05(23)(a)1.
1. A personal exemption of $600 if the taxpayer is required to file a return under s.
71.03 (2) (a) 1. or
2. and $600 for the taxpayer's spouse, except if the spouse is filing separately or as a head of household.
71.05(23)(a)2.
2. An exemption of $600 for each individual for whom the taxpayer is entitled to an exemption for the taxable year under section
151 (c) of the Internal Revenue Code.
71.05(23)(a)3.
3. An additional exemption of $200 if the taxpayer has reached the age of 65 before the close of the taxable year to which his or her tax return relates and $200 for the taxpayer's spouse if he or she has reached the age of 65 before the close of the taxable year to which his or her tax return relates, except if the spouse is filing separately or as a head of household.
71.05(23)(b)
(b) For taxable years that begin after December 31, 2000:
71.05(23)(b)1.
1. A personal exemption of $700 if the taxpayer is required to file a return under s.
71.03 (2) (a) 1. or
2. and $700 for the taxpayer's spouse, except if the spouse is filing separately or as a head of household.
71.05(23)(b)2.
2. An exemption of $700 for each dependent, as defined under section
152 of the Internal Revenue Code, of the taxpayer.
71.05(23)(b)3.
3. An additional exemption of $250 if the taxpayer has reached the age of 65 before the close of the taxable year to which his or her tax return relates and $250 for the taxpayer's spouse if he or she has reached the age of 65 before the close of the taxable year to which his or her tax return relates, except if the spouse is filing separately or as a head of household.
71.05(23)(c)
(c) With respect to persons who change their domicile into or from this state during the taxable year and nonresident persons, personal exemptions under pars.
(a) and
(b) shall be limited to the fraction of the amount so determined that Wisconsin adjusted gross income is of 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 a person and that person's spouse are not both domiciled in this state during the entire taxable year, their personal exemptions on a joint return are determined by multiplying the personal exemption that would be available to each of them if they were both domiciled in this state during the entire taxable year 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.
71.05(24)
(24) Income tax deferral; long-term capital assets. 71.05(24)(a)1.
1. “Claimant" means an individual; an individual partner or member of a partnership, limited liability company, or limited liability partnership; or an individual shareholder of a tax-option corporation.
71.05(24)(a)3.
3. “Long-term capital gain" means the gain realized from the sale of any capital asset held more than one year that is treated as a long-term gain under the Internal Revenue Code.
71.05(24)(b)
(b) For taxable years beginning after December 31, 2010, and before January 1, 2014, a claimant may subtract from federal adjusted gross income any amount, up to $10,000,000, of a long-term capital gain if the claimant does all of the following:
71.05(24)(b)1.
1. Deposits the gain into a segregated account in a financial institution.
71.05(24)(b)2.
2. Within 180 days after the sale of the asset that generated the gain, invests all of the proceeds in the account described under subd.
1. in a qualified new business venture.
71.05(24)(b)3.
3. After making the investment as described under subd.
2., notifies the department, on a form prepared by the department, that the claimant will not declare on the claimant's income tax return the gain described under subd.
1. because the claimant has reinvested the capital gain as described under subd.
2. The form shall be sent to the department along with the claimant's income tax return for the year to which the claim relates.
71.05(24)(c)
(c) The basis of the investment described in par.
(b) 2. shall be calculated by subtracting the gain described in par.
(b) 1. from the amount of the investment described in par.
(b) 2. 71.05(24)(d)
(d) If a claimant defers the payment of income taxes on a capital gain under this subsection, the claimant may not use the gain described under par.
(b) 1. to net capital gains and losses, as described under sub.
(10) (c).
71.05(25)
(25) Capital gains exclusion; qualified Wisconsin business. 71.05(25)(a)1.
1. “Claimant" means an individual; an individual partner or member of a partnership, limited liability company, or limited liability partnership; or an individual shareholder of a tax-option corporation.
71.05(25)(a)1m.
1m. “Investment” means amounts paid to acquire stock or other ownership interest in a partnership, corporation, tax-option corporation, or limited liability company treated as a partnership or corporation.
71.05(25)(a)1s.
1s. “Qualified Wisconsin business" means a business certified by the Wisconsin Economic Development Corporation under s.
238.145, 2011 stats., or registered with the department under s.
73.03 (69).
71.05(25)(a)2.
2. “Qualifying gain" means a long-term capital gain under the Internal Revenue Code realized from the sale of an investment made after December 31, 2010, and held for at least 5 uninterrupted years in a business that for the year of investment and at least 2 of the 4 subsequent years was a qualified Wisconsin business; except that a qualifying gain may not include any amount for which the claimant claimed a subtraction under sub.
(24) (b) or any gain described under sub.
(26) (b) and may not exceed the fair market value of the investment on the date sold, less the fair market value of the investment on the date acquired.
71.05(25)(b)
(b) For taxable years beginning after December 31, 2015, for an investment in a qualified Wisconsin business made after December 31, 2010, and held for at least 5 uninterrupted years, a claimant may subtract from federal adjusted gross income the amount of the claimant's qualifying gain in the year to which the claim relates, to the extent that it is not subtracted under sub.
(6) (b) 9. or
9m. 71.05(26)
(26) Income tax deferral; qualified Wisconsin business. 71.05(26)(a)1.
1. “Claimant" means an individual; an individual partner or member of a partnership, limited liability company, or limited liability partnership; or an individual shareholder of a tax-option corporation.
71.05(26)(a)2m.
2m. “Investment” means amounts paid to acquire stock or other ownership interest in a partnership, corporation, tax-option corporation, or limited liability company treated as a partnership or corporation.
71.05(26)(a)3.
3. “Long-term capital gain" means the gain realized from the sale of any capital asset held more than one year that is treated as a long-term gain under the Internal Revenue Code.
71.05(26)(a)4.
4. “Qualified Wisconsin business" means a business certified by the Wisconsin Economic Development Corporation under s.
238.146, 2011 stats., or registered with the department under s.
73.03 (69).
71.05(26)(b)
(b) For taxable years beginning after December 31, 2010, and before January 1, 2014, a claimant may subtract from federal adjusted gross income any amount of a long-term capital gain if the claimant does all of the following:
71.05(26)(b)1.
1. Deposits the gain into a segregated account in a financial institution.
71.05(26)(b)2.
2. Within 180 days after the sale of the asset that generated the gain, invests all of the proceeds in the account described under subd.
1. in a qualified Wisconsin business.
71.05(26)(b)3.
3. After making the investment as described under subd.
2., notifies the department, on a form prepared by the department, that the claimant will not declare on the claimant's income tax return the gain described under subd.
1. because the claimant has reinvested the capital gain as described under subd.
2. The form shall be sent to the department along with the claimant's income tax return for the year to which the claim relates.
71.05(26)(bm)
(bm) For taxable years beginning after December 31, 2013, a claimant may subtract from federal adjusted gross income any amount of a long-term capital gain if the claimant does all of the following:
71.05(26)(bm)1.
1. Within 180 days after the sale of the asset that generated the gain, invests all of the gain in a qualified Wisconsin business.
71.05(26)(bm)2.
2. After making the investment as described under subd.
1., notifies the department, on a form prepared by the department, that the claimant will not declare the gain on the claimant's income tax return because the claimant has reinvested the capital gain as described under subd.
1. The form shall be sent to the department along with the claimant's income tax return for the year to which the claim relates.
71.05(26)(c)
(c) The basis of the investment described in par.
(b) 2. shall be calculated by subtracting the gain described in par.
(b) 1. from the amount of the investment described in par.
(b) 2. The basis of the investment described in par.
(bm) 1. shall be calculated by subtracting the gain described in par.
(bm) 1. from the amount of the investment described in par.
(bm) 1. 71.05(26)(d)
(d) If a claimant defers the payment of income taxes on a capital gain under this subsection, the claimant may not use the gain to net capital gains and losses, as described under sub.
(10) (c).
71.05(26)(e)
(e) If a claimant claims the subtraction under this subsection, the claimant may not use the gain described under par.
(b) 1. to claim a subtraction under sub.
(24).
71.05(26)(f)
(f) If a claimant claims a subtraction for a capital gain under par.
(b) or
(bm), the gain may not be used as a qualifying gain under sub.
(25).
71.05 History
History: 1987 a. 312;
1987 a. 411 ss.
42,
43,
45,
47 to
49,
51 to
53;
1989 a. 31,
46;
1991 a. 2,
37,
39,
269;
1993 a. 16,
112,
204,
263,
437;
1995 a. 27,
56,
209,
227,
261,
371,
403,
453;
1997 a. 27,
35,
39,
237;
1999 a. 9,
32,
44,
54,
65,
167;
2001 a. 16,
104,
105,
109;
2003 a. 85,
99,
119,
135,
183,
255,
289,
321,
326;
2005 a. 22,
25,
216,
254,
335,
361,
479,
483;
2007 a. 20,
96,
226;
2009 a. 2,
28,
205,
265,
269,
276,
295,
332,
344;
2011 a. 3,
5,
10,
32,
212,
232,
237;
2011 a. 260 ss.
80,
81;
2013 a. 19,
20,
128,
145;
2013 a. 166 s.
76;
2013 a. 173,
227;
2015 a. 55,
60,
84,
195;
2015 a. 197 s.
51;
2015 a. 216,
312;
2017 a. 17,
58,
59,
197,
231,
368.
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 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. DOR,
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 percent.
71.06(1)(b)
(b) On all taxable income exceeding $7,500 but not exceeding $15,000, 6.55 percent.
71.06(1)(c)
(c) On all taxable income exceeding $15,000, 6.93 percent.
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 percent.
71.06(1m)(b)
(b) On all taxable income exceeding $7,500 but not exceeding $15,000, 6.37 percent.
71.06(1m)(c)
(c) On all taxable income exceeding $15,000, 6.77 percent.
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 percent.
71.06(1n)(b)
(b) On all taxable income exceeding $7,500 but not exceeding $15,000, 6.33 percent.
71.06(1n)(c)
(c) On all taxable income exceeding $15,000 but not exceeding $112,500, 6.55 percent.
71.06(1n)(d)
(d) On all taxable income exceeding $112,500, 6.75 percent.
71.06(1p)
(1p) Fiduciaries, single individuals and heads of households; 2001 to 2012. 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, and before January 1, 2013:
71.06(1p)(a)
(a) On all taxable income from $0 to $7,500, 4.6 percent.
71.06(1p)(b)
(b) On all taxable income exceeding $7,500 but not exceeding $15,000, 6.15 percent.
71.06(1p)(c)
(c) On all taxable income exceeding $15,000 but not exceeding $112,500, 6.5 percent.
71.06(1p)(d)
(d) On all taxable income exceeding $112,500 but not exceeding $225,000, 6.75 percent.
71.06(1p)(e)
(e) On all taxable income exceeding $225,000, 7.75 percent.
71.06(1q)
(1q) Fiduciaries, single individuals, and heads of households; after 2012. 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, 2012:
71.06(1q)(a)
(a) On all taxable income from $0 to $7,500, 4.40 percent, except that for taxable years beginning after December 31, 2013, 4.0 percent.
71.06(1q)(b)
(b) On all taxable income exceeding $7,500 but not exceeding $15,000, 5.84 percent.
71.06(1q)(c)
(c) On all taxable income exceeding $15,000 but not exceeding $225,000, 6.27 percent.
71.06(1q)(d)
(d) On all taxable income exceeding $225,000, 7.65 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:
