Chapter 71

71.05(1)(c)10.c. c. The bonds or notes are issued to fund a redevelopment project in this state or a housing project in this state, and the authority exists for bonds or notes to be issued by an entity described under s. 66.1201, 66.1333, or 66.1335.

71.05(1)(c)11. 11. The Wisconsin Health and Educational Facilities Authority under s. 231.03 (6), if the bonds or notes are issued for the benefit of a person who is eligible to receive the proceeds of bonds or notes from another entity for the same purpose for which the bonds or notes are issued under s. 231.03 (6) and the interest income received from the other bonds or notes is exempt from taxation under this subchapter.

71.05(1)(c)12. 12. The Wisconsin Housing and Economic Development Authority, if the bonds or notes are issued to provide loans to a public affairs network under s. 234.75 (4).

71.05(1)(c)13. 13. An entity described under, or an entity whose bonds are issued under, s. 66.1201, 66.1333, or 66.1335.

71.05(1)(c)14. 14. The Wisconsin Health and Educational Facilities Authority under s. 231.03 (6), if the bonds or notes are issued in an amount totaling $35,000,000 or less, and to the extent that the interest income received is not otherwise exempt under this subsection.

71.05(1)(f) (f) Income from the sales of certain insurance policies. Income received by the original policyholder or original certificate holder who has a catastrophic or life-threatening illness or condition from the sale of a life insurance policy or certificate, or the sale of the death benefit under a life insurance policy or certificate, under a life settlement contract, as defined in s. 632.69 (1) (k). In this paragraph, “catastrophic or life-threatening illness or condition” includes AIDS, as defined in s. 49.686 (1) (a), and HIV infection, as defined in s. 49.686 (1) (d).

71.05(1)(g) (g) Income from work performed during a declared state of emergency. Income of an out-of-state business, as defined in s. 323.12 (5) (a) 6., and an out-of-state employee, as defined in s. 323.12 (5) (a) 7., from disaster relief work, as defined under s. 323.12 (5) (a) 3.

71.05(1)(h) (h) Wisconsin allocations from the federal coronavirus relief fund. Income received in the form of allocations issued by this state with moneys received from the coronavirus relief fund authorized under 42 USC 801 to be used for any of the following purposes:

71.05(1)(h)1. 1. Broadband expansion.

71.05(1)(h)2. 2. Privately owned movie theater grants.

71.05(1)(h)3. 3. A nonprofit grant program.

71.05(1)(h)4. 4. A tourism grants program.

71.05(1)(h)5. 5. A cultural organization grant program.

71.05(1)(h)6. 6. Music and performance venue grants.

71.05(1)(h)7. 7. Lodging industry grants.

71.05(1)(h)8. 8. Low-income home energy assistance.

71.05(1)(h)9. 9. A rental assistance program.

71.05(1)(h)10. 10. Supplemental child care grants.

71.05(1)(h)11. 11. A food insecurity initiative.

71.05(1)(h)12. 12. A farm support program.

71.05(1)(h)13. 13. Grants to small businesses.

71.05(1)(h)14. 14. Ethanol industry assistance.

71.05(1)(h)15. 15. Wisconsin Eye.

71.05(1)(hn) (hn) Wisconsin grants awarded during and related to the pandemic. Income received in the form of a grant issued by the Wisconsin Economic Development Corporation during and related to the COVID-19 pandemic under the ethnic minority emergency grant program. Amounts otherwise deductible under this chapter that are paid directly or indirectly with the grant money are deductible.

71.05(1)(hp) (hp) Grants from the federal restaurant revitalization fund. Income received in the form of a grant from the restaurant revitalization fund under section 5003 of the federal American Rescue Plan Act of 2021, P.L. 117-2. Amounts otherwise deductible under this chapter that are paid directly or indirectly with the grant money are deductible. Amounts excluded under this paragraph by a tax-option corporation or partnership shall be treated as tax-exempt income for purposes of sections 705 and 1366 of the Internal Revenue Code.

71.05(1)(i) (i) Commercial loans. Income of a tax-option corporation that is a financial institution, as defined in s. 69.30 (1) (b), including interest, fees, and penalties, derived from a commercial loan of five million dollars or less provided to a person residing or located in this state and used primarily for a business or agricultural purpose in this state.

71.05(2) (2) Nonresident reciprocity. All payments received by natural persons domiciled outside Wisconsin who derive income from the performance of personal services in Wisconsin shall be excluded from Wisconsin gross income to the extent that it is subjected to an income tax imposed by the state of domicile; provided that the law of the state of domicile allows a similar exclusion of income from personal services earned in such state by natural persons domiciled in Wisconsin, or a credit against the tax imposed by such state on such income equal to the Wisconsin tax on such income.

71.05 Cross-reference Cross-reference: See also s. Tax 2.02, Wis. adm. code.

71.05(3) (3) Menominee Indian tribe; distribution of assets. No distribution of assets from the United States to the members of the Menominee Indian tribe as defined in s. 49.385 or their lawful distributees, or to any corporation, or organization, created by the tribe or at its direction pursuant to section 8, P.L. 83-399, as amended, and no issuance of stocks, bonds, certificates of indebtedness, voting trust certificates or other securities by any such corporation or organization, or voting trust, to such members of the tribe or their lawful distributees shall be subject to income taxes under this chapter; provided, that so much of any cash distribution made under said P.L. 83-399 as consists of a share of any interest earned on funds deposited in the treasury of the United States pursuant to the supplemental appropriation act, 1952, (65 Stat. 736, 754) shall not by virtue of this subsection be exempt from the individual income tax of this state in the hands of the recipients for the year in which paid. For the purpose of ascertaining the gain or loss resulting from the sale or other disposition of such assets and stocks, bonds, certificates of indebtedness and other securities under this chapter, the fair market value of such property, on termination date as defined in s. 70.057 (1), 1967 stats., shall be the basis for determining the amount of such gain or loss.

71.05(5) (5) Fractional year. When an income tax return is required to be filed for a fractional part of a year under s. 71.03 (3), the Wisconsin taxable income shall be placed on an annual basis using the method applicable for federal income taxes under section 443 (b) (1) of the internal revenue code.

71.05(6) (6) Modifications and transitional adjustments. Some of the modifications referred to in s. 71.01 (13) and (14) are:

71.05(6)(a) (a) Additions. To federal adjusted gross income add:

71.05(6)(a)1. 1. The amount of any interest, except interest under par. (b) 1., less related expenses, which is not included in federal adjusted gross income, and except the amount of any interest or original issue discount derived from bonds issued under subch. IV of ch. 18.

71.05 Cross-reference Cross-reference: See also s. Tax 3.095, Wis. adm. code.

71.05(6)(a)2. 2. Losses not allocable or apportionable to this state under s. 71.04.

71.05(6)(a)3. 3. Any amount deducted as a capital loss carry-over from any taxable year prior to the 1965 taxable year.

71.05(6)(a)4. 4. The amount of any lump sum distribution taxable under section 402 (d) (1) of the internal revenue code (relating to distributions from employee benefit plans).

71.05(6)(a)5. 5. Any amount deducted as a capital loss carry-over from any taxable year prior to the 1975 taxable year if the capital asset which generated the loss had a situs outside of Wisconsin.

71.05(6)(a)6. 6. Any amount received in taxable year 1979 or thereafter by a Wisconsin resident shareholder as a proportionate share of the earnings and profits of a tax-option corporation which was accumulated prior to the beginning of its 1979 taxable year and not considered a dividend when received under section 1375 (d) (1) of the internal revenue code as amended to December 31, 1978.

71.05(6)(a)7. 7. Any amount deducted under section 170 (i) of the internal revenue code (relating to the deduction of charitable contributions by individuals who do not itemize deductions).

71.05(6)(a)8. 8. Wages paid to an entertainer or entertainment corporation unless the taxpayer complies with ss. 71.63 (3) (b), 71.64 (4) and (5) and 71.80 (15) (b).

71.05(6)(a)9. 9. Any amount excluded from adjusted gross income under section 641 (c) (1) of the internal revenue code (relating to gain on the sale of any property by a trust within 2 years of acquisition).

71.05(6)(a)12. 12. All penalties for early withdrawals from time savings accounts and deposits deducted for federal income tax purposes and paid while the individual charged with the penalty was a nonresident of this state; all reforestation expenses related to property not in this state, deducted for federal income tax purposes and paid while the individual paying the expense was not a resident of this state; all contributions to individual retirement accounts, simplified employee pension plans and self-employment retirement plans and all deductible employee contributions, deducted for federal income tax purposes and in excess of that amount multiplied by a fraction the numerator of which is the individual’s wages and net earnings from a trade or business taxable by this state and the denominator of which is the individual’s total wages and net earnings from a trade or business; the contributions to a Keogh plan deducted for federal income tax purposes and in excess of that amount multiplied by a fraction the numerator of which is the individual’s net earnings from a trade or business, taxable by this state, and the denominator of which is the individual’s total net earnings from a trade or business; the amount of health insurance costs of self-employed individuals deducted under section 162 (L) of the internal revenue code for federal income tax purposes and in excess of that amount multiplied by a fraction the numerator of which is the individual’s net earnings from a trade or business, taxable by this state, and the denominator of which is the individual’s total net earnings from a trade or business; and the amount of self-employment taxes deducted under section 164 (f) of the internal revenue code for federal income tax purposes and in excess of that amount multiplied by a fraction the numerator of which is the individual’s net earnings from a trade or business, taxable by this state, and the denominator of which is the individual’s total net earnings from a trade or a business.

71.05(6)(a)13. 13. The amount claimed by a fiduciary as an itemized deduction under section 164 or 216 (a) (1) of the internal revenue code on the federal fiduciary return.

71.05(6)(a)14. 14. Any amount received as a proportionate share of the earnings and profits of a corporation that is an S corporation for federal income tax purposes if those earnings and profits accumulated during a year for which the shareholders have elected under s. 71.365 (4) (a) not to be a tax-option corporation, to the extent not included in federal adjusted gross income for the current year. This subdivision does not apply to earnings and profits accumulated during a year for which a tax-option corporation has made an election under s. 71.365 (4m) (a) to be taxed at the entity level.

71.05(6)(a)15. 15. The amount of the credits computed under all of the following and not passed through by a partnership, limited liability company, or tax-option corporation that has added that amount to the partnership’s, company’s, or tax-option corporation’s income under s. 71.21 (4) or 71.34 (1k) (g):

71.05(6)(a)15.a. a. Section 71.07 (2dm).

Effective date note NOTE: Subd. 15. a. is repealed eff. 1-1-43 by 2025 Wis. Act 118, section 36.

71.05(6)(a)15.b. b. Section 71.07 (2dx).

Effective date note NOTE: Subd. 15. b. is repealed eff. 1-1-43 by 2025 Wis. Act 118, section 37.

71.05(6)(a)15.c. c. Section 71.07 (2dy).

Effective date note NOTE: Subd. 15. c. is repealed eff. 1-1-37 by 2025 Wis. Act 118, section 38.

71.05(6)(a)15.d. d. Section 71.07 (3g).

Effective date note NOTE: Subd. 15. d. is repealed eff. 1-1-41 by 2025 Wis. Act 118, section 39.

71.05(6)(a)15.e. e. Section 71.07 (3h).

Effective date note NOTE: Subd. 15. e. is repealed eff. 1-1-35 by 2025 Wis. Act 118, section 40.

71.05(6)(a)15.f. f. Section 71.07 (3n).

Effective date note NOTE: Subd. 15. f. is repealed eff. 1-1-35 by 2025 Wis. Act 118, section 41.

71.05(6)(a)15.g. g. Section 71.07 (3q).

Effective date note NOTE: Subd. 15. g. is repealed eff. 1-1-30 by 2025 Wis. Act 118, section 42.

71.05(6)(a)15.h. h. Section 71.07 (3s).

Effective date note NOTE: Subd. 15. h. is repealed eff. 1-1-32 by 2025 Wis. Act 118, section 43.

71.05(6)(a)15.i. i. Section 71.07 (3t).

Effective date note NOTE: Subd. 15. i. is repealed eff. 1-1-29 by 2025 Wis. Act 118, section 44.

71.05(6)(a)15.j. j. Section 71.07 (3w).

71.05(6)(a)15.k. k. Section 71.07 (3wm).

71.05(6)(a)15.L. L. Section 71.07 (3y).

71.05(6)(a)15.m. m. Section 71.07 (4k).

71.05(6)(a)15.n. n. Section 71.07 (4n).

Effective date note NOTE: Subd. 15. n. is repealed eff. 1-1-35 by 2025 Wis. Act 118, section 45.

71.05(6)(a)15.o. o. Section 71.07 (5f).

71.05(6)(a)15.p. p. Section 71.07 (5h).

71.05(6)(a)15.q. q. Section 71.07 (5i).

Effective date note NOTE: Subd. 15. q. is repealed eff. 1-1-35 by 2025 Wis. Act 118, section 46.

71.05(6)(a)15.r. r. Section 71.07 (5j).

Effective date note NOTE: Subd. 15. r. is repealed eff. 1-1-35 by 2025 Wis. Act 118, section 47.

71.05(6)(a)15.s. s. Section 71.07 (5k).

71.05(6)(a)15.t. t. Section 71.07 (5r).

Effective date note NOTE: Subd. 15. t. is repealed eff. 1-1-35 by 2025 Wis. Act 118, section 48.

71.05(6)(a)15.u. u. Section 71.07 (5rm).

Effective date note NOTE: Subd. 15. u. is repealed eff. 1-1-35 by 2025 Wis. Act 118, section 49.

71.05(6)(a)15.v. v. Section 71.07 (6n).

Effective date note NOTE: Subd. 15. v. is repealed eff. 1-1-34 by 2025 Wis. Act 118, section 50.

71.05(6)(a)15.w. w. Section 71.07 (10).

71.05(6)(a)16. 16. Any amount recognized as a loss under section 1001 (c) of the Internal Revenue Code if a surviving spouse and a distributee exchange their interests in marital property under s. 766.31 (3) (b).

71.05(6)(a)17. 17. The amount received under s. 71.60 that is not included in federal adjusted gross income.

71.05(6)(a)18. 18. Any amount deducted as moving expenses under section 217 of the internal revenue code if the expense relates to a move made by an individual who changes his or her domicile from this state as a result of the move or if the expense relates to a move made by an individual who is not domiciled in this state as a result of the move.

71.05(6)(a)20. 20. The amount of any excess distribution, as that term is used in section 1291 (b) of the Internal Revenue Code, from a passive foreign investment company.

71.05(6)(a)23. 23. Any amount deducted by an individual under section 62 (a) (20) of the Internal Revenue Code related to attorney fees or court costs, involving an unlawful discrimination claim, if the individual is a nonresident or part-year resident of this state and if the judgment or settlement resulting from the claim is not taxable by this state.