Chapter 71

71.07(6e)(a) (a) Definitions. In this subsection:

71.07(6e)(a)1. 1. “Claimant” means an eligible unremarried surviving spouse, an eligible veteran, or an eligible spouse who files a claim under this subsection.

71.07(6e)(a)1m. 1m. “Eligible spouse” means the spouse of an eligible veteran who files a separate return.

71.07(6e)(a)2. 2. “Eligible unremarried surviving spouse” means an unremarried surviving spouse of one of the following, as verified by the department of veterans affairs:

71.07(6e)(a)2.a. a. An individual who had served on active duty in the U.S. armed forces or in forces incorporated as part of the U.S. armed forces; who was a resident of this state at the time of entry into that active service or who had been a resident of this state for any consecutive 5-year period after entry into that active duty service; and who, while a resident of this state, died while on active duty.

71.07(6e)(a)2.b. b. An individual who had served on active duty under honorable conditions in the U.S. armed forces or in forces incorporated as part of the U.S. armed forces; who was a resident of this state at the time of entry into that active service or who had been a resident of this state for any consecutive 5-year period after entry into that active duty service; who was a resident of this state at the time of his or her death; and who had either a service-connected disability rating of 100 percent under 38 USC 1114 or 1134 or a 100 percent disability rating based on individual unemployability.

71.07(6e)(a)2.c. c. An individual who had served in the national guard or a reserve component of the U.S. armed forces; who was a resident of this state at the time of entry into that service or who had been a resident of this state for any consecutive 5-year period after entry into that service; and who, while a resident of this state, died in the line of duty while on active or inactive duty for training purposes.

71.07(6e)(a)2.d. d. An individual who had served on active duty under honorable conditions in the U.S. armed forces or in forces incorporated as part of the U.S. armed forces; who was a resident of this state at the time of entry into that active service or who had been a resident of this state for any consecutive 5-year period after entry into that active duty service; who was a resident of this state at the time of his or her death; and following the individual’s death, his or her spouse began to receive, and continues to receive, dependency and indemnity compensation, as defined in 38 USC 101 (14).

71.07(6e)(a)3. 3. “Eligible veteran” means an individual who is verified by the department of veterans affairs as meeting all of the following conditions:

71.07(6e)(a)3.a. a. Served on active duty under honorable conditions in the U.S. armed forces or in forces incorporated in the U.S. armed forces.

71.07(6e)(a)3.b. b. Was a resident of this state at the time of entry into that active service or had been a resident of this state for any consecutive 5-year period after entry into that service.

71.07(6e)(a)3.c. c. Is currently a resident of this state for purposes of receiving veterans benefits under ch. 45.

71.07(6e)(a)3.d. d. Has either a service-connected disability rating of 100 percent under 38 USC 1114 or 1134 or a 100 percent disability rating based on individual unemployability.

71.07(6e)(a)3e. 3e. “Individual unemployability” means a condition under which a veteran has a service-connected disability rating of either 60 percent under 38 USC 1114 or 1134 or two or more service-connected disability conditions where one condition has at least a 40 percent scheduler rating and the combined scheduler rating for all conditions is at least 70 percent, and has an administrative adjustment added to his or her service-connected disability, due to individual unemployability, such that the federal Department of Veterans Affairs rates the veteran 100 percent disabled.

71.07(6e)(a)4. 4. “Principal dwelling” has the meaning given in sub. (9) (a) 2.

71.07(6e)(a)5. 5. “Property taxes” means real property taxes, exclusive of special assessments, delinquent interest, and charges for service, paid by a claimant, and the claimant’s spouse if filing a joint return, on the eligible veteran’s or unremarried surviving spouse’s principal dwelling in this state during the taxable year for which credit under this subsection is claimed, less any property taxes paid which are properly includable as a trade or business expense under section 162 of the Internal Revenue Code. If the principal dwelling on which the taxes were paid is owned by 2 or more persons or entities as joint tenants or tenants in common or is owned by spouses as marital property, “property taxes” is that part of property taxes paid that reflects the ownership percentage of the claimant, except that this limitation does not apply to spouses who file a joint return. If the principal dwelling is sold during the taxable year, the “property taxes” for the seller and buyer shall be the amount of the tax prorated to each in the closing agreement pertaining to the sale or, if not so provided for in the closing agreement, the tax shall be prorated between the seller and buyer in proportion to months of their respective ownership. “Property taxes” includes monthly municipal permit fees in respect to a principal dwelling collected under s. 66.0435 (3) (c).

71.07(6e)(b) (b) Filing claims. Subject to the limitations provided in this subsection, a claimant may claim as a credit against the tax imposed under s. 71.02 the amount of the claimant’s property taxes. If the allowable amount of the claim exceeds the income taxes otherwise due on the claimant’s income, the amount of the claim not used as an offset against those taxes shall be certified by the department of revenue to the department of administration for payment to the claimant by check, share draft, or other draft from the appropriation under s. 20.835 (2) (em).

71.07(6e)(c) (c) Limitations.

71.07(6e)(c)1. 1. No credit may be allowed under this subsection unless it is claimed within the time period under s. 71.75 (2).

71.07(6e)(c)2. 2. No credit may be allowed under this subsection if the individual, or the individual’s spouse, files a claim under sub. (3m) or (9) [sub. (9)] or subch. VIII or IX that relates to the same taxable year for which a claim is made under this subsection.

71.07 Note NOTE: The correct cross-reference is shown in brackets. Sub. (3m) was repealed by 2021 Wis. Act 127. Corrective legislation is pending.

71.07(6e)(c)3. 3. If an eligible veteran and an eligible spouse file separate returns, each spouse may claim a credit under this subsection based on their respective ownership interest in the eligible veteran’s principal dwelling.

71.07(6e)(d) (d) Administration. Subsection (9e) (d), to the extent that it applies to the credit under that subsection, applies to the credit under this subsection.

71.07(6m) (6m) Armed forces member tax credit.

71.07(6m)(a) (a) Definitions. In this subsection:

71.07(6m)(a)1. 1. “Claimant” means an active duty member of the U.S. armed forces, as defined in 26 USC 7701 (a) (15).

71.07(6m)(a)2. 2. “Military income” means an amount of basic, special or incentive pay income, as those terms are used in 37 USC chapters 3 and 5, received by a claimant from the federal government.

71.07(6m)(b) (b) Filing claims. Subject to the limitations and conditions provided in this subsection, a claimant may claim as a credit against the tax imposed under s. 71.02, up to the amount of those taxes, one of the following amounts:

71.07(6m)(b)1. 1. For taxable years beginning before January 1, 2006, an amount up to $200 of military income for services performed by the claimant while he or she is stationed outside of the United States.

71.07(6m)(b)2. 2. For taxable years beginning after December 31, 2005, an amount up to $300 of military income for services performed by the claimant while he or she is stationed outside of the United States.

71.07(6m)(c) (c) Limitations and conditions.

71.07(6m)(c)1. 1. No credit may be allowed under this subsection unless it is claimed within the time period under s. 71.75 (2).

71.07(6m)(c)2. 2. Part-year residents and nonresidents of this state are not eligible for the credit under this subsection.

71.07(6m)(c)3. 3. If both spouses of a married couple meet the definition of claimant under par. (a) 1., each spouse may claim the credit under this subsection.

71.07(6m)(c)4. 4. No credit may be claimed under this subsection by an individual who claims the subtraction under s. 71.05 (6) (b) 34.

71.07(6m)(c)5. 5. No new claims may be filed under this subsection for taxable years that begin after December 31, 2020.

71.07(6m)(d) (d) Administration. Subsection (9e) (d), to the extent that it applies to the credit under that subsection, applies to the credit under this subsection.

71.07(6n) (6n) Veteran employment credit.

71.07(6n)(a) (a) Definitions. In this subsection:

71.07(6n)(a)1. 1. “Claimant” means a person who files a claim under this subsection.

71.07(6n)(a)2. 2. “Disabled veteran” means a veteran who is verified by the department of veteran affairs to have a service-connected disability rating of at least 50 percent under 38 USC 1114 or 1134.

71.07(6n)(a)3. 3. “Full-time job” means a regular, nonseasonal full-time position in which an individual, as a condition of employment, is required to work at least 2,080 hours per year, including paid leave and holidays.

71.07(6n)(a)4. 4. “Part-time job” means a regular, nonseasonal part-time position in which an individual, as a condition of employment, is required to work fewer than 2,080 hours per year, including paid leave and holidays.

71.07(6n)(a)5. 5. “Veteran” means a person who is verified by the department of veteran affairs to have served on active duty under honorable conditions in the U.S. armed forces, in forces incorporated as part of the U.S. armed forces, in the national guard, or in a reserve component of the U.S. armed forces.

71.07(6n)(b) (b) Filing claims. Subject to the limitations provided in this subsection, for taxable years beginning after December 31, 2011, a claimant may claim as a credit against the tax imposed under s. 71.02, up to the amount of the tax, an amount equal to any of the following:

71.07(6n)(b)1. 1. For each disabled veteran the claimant hires in the taxable year to work a full-time job at the claimant’s business in this state, $4,000 in the taxable year in which the disabled veteran is hired and $2,000 in each of the 3 taxable years following the taxable year in which the disabled veteran is hired.

71.07(6n)(b)2. 2. Subject to par. (c) 4., for each disabled veteran the claimant hires in the taxable year to work a part-time job at the claimant’s business in this state, $2,000 in the taxable year in which the disabled veteran is hired and $1,000 in each of the 3 taxable years following the taxable year in which the disabled veteran is hired.

71.07(6n)(c) (c) Limitations.

71.07(6n)(c)1. 1. Partnerships, limited liability companies, and tax-option corporations may not claim the credit under this subsection, but the eligibility for, and the amount of, the credit are based on their hiring of disabled veterans, as described under par. (b). A partnership, limited liability company, or tax-option corporation shall compute the amount of credit that each of its partners, members, or shareholders may claim and shall provide that information to each of them. Partners, members of limited liability companies, and shareholders of tax-option corporations may claim the credit in proportion to their ownership interests.

71.07(6n)(c)2. 2. No credit may be claimed under this subsection in any taxable year in which the disabled veteran voluntarily or involuntarily leaves his or her employment with the claimant.

71.07(6n)(c)3. 3. A claimant may claim a credit under this subsection only for hiring a disabled veteran who has received unemployment compensation benefits for at least one week prior to being hired by the claimant, who was receiving such benefits at the time that he or she was hired by the claimant, and who was eligible to receive such benefits at the time the benefits were paid.

71.07(6n)(c)4. 4. With regard to a credit claimed under par. (b) 2., the amount that the claimant may claim is determined as follows:

71.07(6n)(c)4.a. a. Divide the number of hours that the disabled veteran worked for the claimant during the taxable year by 2,080.

71.07(6n)(c)4.b. b. Multiply the amount of the credit under par. (b) 2., as appropriate, by the number determined under subd. 4. a.

71.07(6n)(d) (d) Administration.

71.07(6n)(d)1. 1. Section 71.28 (4) (e) to (h), as it applies to the credit under s. 71.28 (4), applies to the credit under this subsection.

71.07(6n)(d)2. 2. No credit may be claimed under this subsection for taxable years beginning after December 31, 2012. Credits under this subsection for taxable years that begin before January 1, 2013, may be carried forward to taxable years that begin after December 31, 2012.

71.07(7) (7) Other state tax credit.

71.07(7)(a) (a) In this subsection:

71.07(7)(a)1. 1. “Net Wisconsin income tax” means the gross Wisconsin income tax less all nonrefundable credits that may be claimed by that taxpayer, except the credit for taxes paid to other states.

71.07(7)(a)2. 2. “State” includes the District of Columbia, but does not include the commonwealth of Puerto Rico or the several territories organized by Congress.

71.07(7)(b) (b)

71.07(7)(b)1. 1. Subject to conditions and limitations in pars. (c) and (d), if a resident individual, estate or trust pays a net income tax to another state, that resident individual, estate or trust may credit the net tax paid to that other state on that income against the net income tax otherwise payable to this state on income of the same year. The credit may not be allowed unless the income taxed by the other state is also considered income for Wisconsin tax purposes. The credit may not be allowed unless claimed within the time provided in s. 71.75 (2), but s. 71.75 (4) does not apply to those credits. For purposes of this subdivision, amounts declared and paid under the income tax law of another state are considered a net income tax paid to that other state only in the year in which the income tax return for that state was required to be filed.

71.07(7)(b)2. 2. Income and franchise taxes paid to another state by a tax-option corporation, partnership, or limited liability company that is treated as a partnership may be claimed as a credit under this paragraph by that corporation’s shareholders, that partnership’s partners, or that limited liability company’s members who are residents of this state and who otherwise qualify under this paragraph, unless the tax-option corporation, partnership, or limited liability company has made an election under s. 71.21 (6) (a) or 71.365 (4m) (a).

71.07(7)(b)3. 3. Subject to the conditions and limitations in pars. (c) and (d), if a tax-option corporation, partnership, or limited liability company makes an election under s. 71.21 (6) (a) or 71.365 (4m) (a), that tax-option corporation, partnership, or limited liability company may credit the net income or franchise tax paid by the entity to another state on that income and the net income tax on that income paid by the entity on behalf of its shareholders, partners, and members that are residents of this state on a composite return filed with the other state against the net income or franchise tax otherwise payable to this state on income of the same year. The credit may not be allowed unless the income taxed by the other state is also considered income for Wisconsin tax purposes and is otherwise attributable to amounts that would be reportable to this state by shareholders, partners, or members of the tax-option corporation, partnership, or limited liability company that are residents of this state if the election under s. 71.21 (6) (a) or 71.365 (4m) (a) was not made. The credit may not be allowed unless claimed within the time provided in s. 71.75 (2), but s. 71.75 (4) does not apply to those credits. For purposes of this subdivision, amounts declared and paid under the income tax law of another state are considered a net income tax paid to that other state only in the year in which the income tax return for that state was required to be filed.

71.07(7)(c) (c) The total credits under par. (b) 1. and 2. may not exceed an amount determined by multiplying the taxpayer’s net Wisconsin income tax by a ratio derived by dividing the income subject to tax in the other state that is also subject to tax in Wisconsin while the taxpayer is a resident of Wisconsin, by the taxpayer’s Wisconsin adjusted gross income. The credit under par. (b) 3. may not exceed an amount determined by multiplying the income subject to tax in the other state that is also subject to tax in Wisconsin by 7.9 percent.

71.07(7)(d) (d) The limitation in par. (c) does not apply to income that is taxed by one of the 4 states that border this state.

71.07 Cross-reference Cross-reference: See also s. Tax 2.955, Wis. adm. code.

71.07(8b) (8b) Low-income housing credit.

71.07(8b)(a) (a) Definitions. In this subsection:

71.07(8b)(a)1. 1. “Allocation certificate” means a statement issued by the authority certifying that a qualified development is eligible for a credit under this subsection and specifying the amount of the credit that the owners of the qualified development may claim.

71.07(8b)(a)2. 2. “Authority” means the Wisconsin Housing and Economic Development Authority.

71.07(8b)(a)3. 3. “Claimant” means a person who has an ownership interest in a qualified development and who files a claim under this subsection.

71.07(8b)(a)4. 4. “Compliance period” means the 15-year period beginning with the first taxable year of the credit period.

71.07(8b)(a)5. 5. “Credit period” means the period of 6 taxable years beginning with the taxable year in which a qualified development is placed in service. For purposes of this subdivision, if a qualified development consists of more than one building, the qualified development is placed in service in the taxable year in which the last building of the qualified development is placed in service.

71.07(8b)(a)6. 6. “Qualified basis” means the qualified basis determined under section 42 (c) (1) of the Internal Revenue Code.

71.07(8b)(a)7. 7. “Qualified development” means a qualified low-income housing project under section 42 (g) of the Internal Revenue Code that is financed with tax-exempt bonds, pursuant to section 42 (i) (2) of the Internal Revenue Code, and located in this state.

71.07(8b)(b) (b) Filing claims. Subject to the limitations provided in this subsection and in s. 234.45, for taxable years beginning after December 31, 2017, a claimant may claim as a credit against the taxes imposed under s. 71.02 or 71.08, up to the amount of the tax, the amount allocated to the claimant by the authority under s. 234.45 for each taxable year within the credit period.

71.07(8b)(c) (c) Limitations.

71.07(8b)(c)1. 1. No person may claim the credit under par. (b) unless the claimant includes with the claimant’s return a copy of the allocation certificate issued to the qualified development.

71.07(8b)(c)2. 2. A partnership, limited liability company, or tax-option corporation may not claim the credit under this subsection. The partners of a partnership, members of a limited liability company, or shareholders in a tax-option corporation may claim the credit under this subsection based on eligible costs incurred by the partnership, limited liability company, or tax-option corporation. The partnership, limited liability company, or tax-option corporation shall calculate the amount of the credit that may be claimed by each partner, member, or shareholder and shall provide that information to the partner, member, or shareholder. For shareholders of a tax-option corporation, the credit may be allocated in proportion to the ownership interest of each shareholder. Credits computed by a partnership or limited liability company may be claimed in proportion to the ownership interests of the partners or members or allocated to partners or members as provided in a written agreement among the partners or members that is entered into no later than the last day of the taxable year of the partnership or limited liability company, for which the credit is claimed. Any partner or member who claims the credit as allocated by a written agreement shall provide a copy of the agreement with the tax return on which the credit is claimed. A person claiming the credit as provided under this subdivision is solely responsible for any tax liability arising from a dispute with the department of revenue related to claiming the credit.

71.07(8b)(d) (d) Recapture.

71.07(8b)(d)1. 1. As of the last day of any taxable year during the compliance period, if the amount of the qualified basis of a qualified development with respect to a claimant is less than the amount of the qualified basis as of the last day of the immediately preceding taxable year, the amount of the claimant’s tax liability under this subchapter shall be increased by the recapture amount determined by using the method under section 42 (j) of the Internal Revenue Code.

71.07(8b)(d)2. 2. In the event that the recapture of any credit is required in any taxable year, the taxpayer shall include the recaptured proportion of the credit on the return submitted for the taxable year in which the recapture event is identified.

71.07(8b)(e) (e) Administration. Section 71.28 (4) (e) to (h), as it applies to the credit under s. 71.28 (4), applies to the credit under this subsection.

71.07(9) (9) School property tax credit.

71.07(9)(a) (a) In this subsection:

71.07(9)(a)1. 1. “Claimant” means a natural person who files a claim or on whose behalf a claim is filed under this subsection but does not include an estate, fiduciary or trust.

71.07(9)(a)2. 2. “Principal dwelling” means any dwelling, whether owned or rented, and the land surrounding it that is reasonably necessary for use of the dwelling as a primary dwelling of the claimant and may include a part of a multidwelling or multipurpose building and a part of the land upon which it is built that is used as the claimant’s primary dwelling.