Estates and Fiduciaries

  1. What Wisconsin tax returns are required for a deceased taxpayer?
  2. Where do I file the estate's Wisconsin returns?
  3. What are the deadlines for filing the estate's Wisconsin returns?
  4. What extensions are available if I can't file the estate's Wisconsin returns by the due date?
  5. How do I get a Closing Certificate for Fiduciaries?
  6. What are the most common errors in completing the Wisconsin fiduciary return?
  7. What trusts must file Wisconsin fiduciary returns?
  8. Where do I file a trust's fiduciary return?
  9. I received an inheritance from my aunt. Do I have to report it as income on my income tax return?

  1. What Wisconsin tax returns are required for a deceased taxpayer?

    More than one type of tax return may be required for deceased taxpayers, such as:

    Wisconsin Individual Income Tax Return

    A personal representative or petitioner must file an individual income tax return, Form 1, 1A, 1NPR, or WI-Z, for a decedent from the beginning of the year to the date of death if the decedent had a filing requirement. The due date of the individual return is April 15, 2014, for a 2013 income tax return. The personal representative is also responsible for filing returns for any prior years for which the decedent had a filing requirement and did not file a return.

    The filing requirements for tax years beginning in 2013 are as follows:

    • Single person
      1. Under age 65 - gross income of $10,630 or more
      2. Age 65 or older - gross income of $10,880 or more
    • Married persons filing jointly
      1. Both spouses under 65 - $19,280 or more
      2. One spouse 65 or older - $19,530
      3. Both spouses 65 or older - $19,780
    • Married person filing separately
      1. Under age 65 - gross income of $9,190 or more (each spouse)
      2. Age 65 or older - $9,440
    • Head of household
      1. Under age 65 - gross income of $13,520 or more
      2. Age 65 or older - gross income of $13,770 or more
    • Part-year resident or nonresident - gross Wisconsin income of $2,000 or more

    The person who files the return should enter the appropriate code in the Special Conditions box. See the instructions for Form 1, 1A or WI-Z. If the taxpayer did not have to file a return but paid estimated tax or had tax withheld, a return must be filed to get a refund.

    If your spouse died during 2013 and you did not remarry in 2013, you can file a joint return. You can also file a joint return for 2013 if your spouse died in 2014 before filing a 2013 return. A joint return should show your spouse's 2013 income before death and your income for all of 2013. Write "Filing as surviving spouse" in the area where you sign the return. If someone else is the personal representative, he or she must also sign.

    If you are claiming a refund as a surviving spouse filing a joint return with the deceased and you follow the above instructions, you do not have to file the Form I-804.

    Wisconsin Fiduciary Income Tax Return(s)

    Every personal representative or special administrator of an estate of a Wisconsin decedent must file a Wisconsin fiduciary income tax return, Form 2, if the gross income of the estate is $600 or more. Nonresident estates must file Wisconsin fiduciary returns if they have gross income of $600 or more from Wisconsin sources. Gross income means all income, before deducting expenses, reportable to Wisconsin which is received in the form of money, property, or services. It does not include items which are exempt from Wisconsin tax.

    Resident Estate. The estate is considered a resident of the state in which the decedent was domiciled at the time of death. Use Form 2 to file an income tax return and pay the tax due if the estate has gross income of $600 or more for the taxable year.

    Nonresident Estate. Use Form 2 to file an income tax return and pay the tax due if (a) there is income or gain derived from Wisconsin sources, and (b) a federal fiduciary return is required to be filed with the Internal Revenue Service. Income from sources within Wisconsin includes income or gain from:

    • Real or tangible personal property located within the state.
    • A business, trade, profession, or occupation carried on within the state, including a corporation taxed under Subchapter S of the Internal Revenue Code.
    • Personal or professional services performed within the state as an individual or a member of a partnership or limited liability company.
    • Income received from the Wisconsin state lottery or a multistate lottery if the winning lottery ticket or lottery share was purchased from a Wisconsin retailer.

    The first fiduciary income tax return filed by a personal representative or petitioner of an estate covers the period from the date of death of the decedent to the end of the first year selected by the fiduciary. The taxable year cannot be longer than 12 months, must end on the last day of the month, and must coincide with the year selected for filing the federal return. The return is due on the 15th day of the 4th month after the close of the taxable year of the estate.

    Wisconsin Estate Tax Return

    There is no estate tax for decedents dying after December 31, 2007. If the decedent died prior to 2008, see the Form W706 instructions (Estate, Inheritance and Gift Tax Forms) for the filing requirement for a Wisconsin estate tax return or contact the Department of Revenue at (608) 266-2772 for additional information.

    Wisconsin Inheritance Tax Return

    There is no Wisconsin inheritance tax for decedents dying on or after January 1, 1992. If death occurred prior to January 1, 1992, see the Estate, Inheritance and Gift Tax Forms or contact the Department of Revenue at (608) 266-2772 to obtain the appropriate forms.

  2. Where do I file the estate's Wisconsin returns?

    Send the final individual income tax return to:

    If tax is due:
    P.O. Box 268
    Madison, WI 53790-0001

    If a refund or no tax is due:
    P.O. Box 59
    Madison, WI 53785-0001

    Send your Form 2, fiduciary income tax return to:

    If tax due or with a request for a closing certificate for fiduciaries:

    Wisconsin Department of Revenue
    P.O. Box 8918
    Madison, WI 53708-8918

    All other Form 2, fiduciary income tax returns:

    Wisconsin Department of Revenue
    P.O. Box 8955
    Madison, WI 53708-8955

  3. What are the deadlines for filing the estate's Wisconsin returns?

    A final individual income tax return for calendar year 2013 is due April 15, 2014.

    A Wisconsin fiduciary income tax return, Form 2, for an estate for 2013 is due on or before April 15, 2014, for a calendar year filer or 3 1/2 months after the close of the taxable year for a fiscal year filer.

  4. What extensions are available if I can't file the estate's Wisconsin returns by the due date?

    The following extension of time to file options are available for tax returns:

    Individual

    If you have an extension for filing your federal income tax return, this automatically gives you a Wisconsin extension provided you:

    • Estimate your 2013 tax and remit this amount by the due date using 2013 Wisconsin Form 1-ES, and
    • Attach a copy of your federal extension application to your Form 1.

    Extensions available under federal law may be used for Wisconsin purposes, even if you do not need a federal extension because you filed your 2013 federal return by April 15, 2014. To obtain an extension only for Wisconsin, you must attach a statement to your Wisconsin income tax return indicating you wish to take the federal Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, extension provision or attach a copy of the federal Form 4868 with only the name, address, and signature areas completed.

    Fiduciary

    Extensions available under federal law may be used for Wisconsin fiduciary income tax extensions, even if you do not need a federal extension because you file your federal return by the due date. To obtain an extension only for Wisconsin, you must:

    • Estimate your 2013 Wisconsin income tax and pay the amount you will owe by the due date (see the information for individuals above), and
    • Attach a statement to your Form 2 indicating which federal extension provision you are using (for example, automatic 5-month extension) or attach a copy of the appropriate federal extension application form with only the name, address, and signature areas completed.

    No extension is allowed if your estimate of tax is not reasonable.

    Note: Even though you may have an extension of time to file your return, you will owe interest on any tax not paid by the due date. Returns not filed by the original due date, or during an extension period, are subject to additional interest and penalties.

  5. How do I get a Closing Certificate for Fiduciaries?

    You can request a Closing Certificate for Fiduciaries from the Wisconsin Department of Revenue at or after the time that the Form 2, fiduciary income tax return, is filed for the year prior to the final year.

    Section 71.13(2), Wis. Stats., provides that the department may issue a Closing Certificate for Fiduciaries to a personal representative or trustee in order to obtain the court's approval for final distribution and discharge of the fiduciary. The department will issue the Closing Certificate for Fiduciaries only in cases where the court has required it to close a proceeding.

    Trusts

    Complete Schedule CC and attach copies of the trust instrument and any amendments, a statement as to why the trust is closing, copies of the annual court accountings for the previous 3 years, and the petition to the court to close the trust.

    Mail the certificate request to:

    Wisconsin Department of Revenue
    P.O. Box 8918
    Madison, WI 53708-8918

    Estates

    Complete Schedule CC and attach copies of the inventory and will including any codicils with the request. If these documents were previously submitted with a Wisconsin Estate Tax Return, it is not necessary to submit them again.

    The receipt of the Closing Certificate for Fiduciaries will not relieve the fiduciary from the responsibility of filing the final fiduciary return.

    Note: If an estate does not have enough income to require filing and needs a Closing Certificate for Fiduciaries, or if the estate will be filing only one fiduciary return when the estate is closed and needs the closing certificate before filing the return, use the following procedures:

    • Complete the Schedule CC - Request for a Closing Certificate for Fiduciaries
    • Sign and date the Schedule CC
    • Attach copies of the inventory and will
    • Mail the certificate request to:

    Wisconsin Department of Revenue
    P.O. Box 8918
    Madison, WI 53708-8918

  6. What are the most common errors in completing the Wisconsin fiduciary return?

    Listed below are facts and tips summarized in a check list to help you in completing a fiduciary income tax return. These are the most common reasons for delays in approving and issuing Closing Certificates for Fiduciaries.

    Form 2: Filling Out the Fiduciary Income Tax Return (Estates and/or Trusts) Correctly and Completely

    • The fiduciary year for an estate or trust is the year in which it begins, not the year in which it ends.
    • The year printed in the upper right hand corner of the form should be the same as the year the period begins.
    • The Federal Employer Identification Number (EIN) of the trust must be used.
    • The trust name must be the same on each return filed.
    • The type of trust must be indicated on each return filed.
    • The county of jurisdiction must be entered on the Form 2.
    • All appropriate boxes on page 1, page 2, and page 3 of the Form 2 must be checked.
    • The estimated tax payments for fiduciaries must be entered on the correct line of Form 2, and should be verified.
    • The estimated tax payments should be mailed to the Wisconsin Department of Revenue, P.O. Box 930208, Milwaukee, WI 53293-0208, and not to P.O. Box 8906, Madison.
    • A contact name and daytime phone number should be provided.
    • A Form 2 Schedule WD must be filed with a Form 2; a Form 1 Schedule WD may not be substituted.
    • Attach documentation to verify withholding claimed on a Form 2.
    • The federal return Form 1041 and all schedules must be attached.
    • The Schedule 2K-1 must be completed and filed when there is a difference between federal and state income.

    Do Not:

    • File a final fiduciary income tax return with an amount due. All income must be distributed in the final year.
    • File a final return without having distributed the corpus.

    Tips for preparing Schedule CC, Request for a Closing Certificate for Fiduciaries.

    1. The decedent's name should be entered as requested (last name, first name, middle initial). For example, do not enter "Estate of John Doe" or "John Doe Estate."
    2. The certificate will be mailed using the name and address exactly as entered at the top of Schedule CC. Make sure this information is correct, current, and consistent. For example, do not enter the attorney's name and personal representative's address.
    3. Enter the name of the county of jurisdiction, not a numerical code.
    4. Enter the probate number.
    5. For an estate, always enter the decedent's social security number and date of death and the county of jurisdiction.
    6. For an estate, be sure to complete line 3 of Schedule CC if the decedent has not filed tax returns for any of the 4 preceding taxable years.
    7. Include copies of the probate inventory and will, if there is one. If sending them as PDF files, please make sure your software supports this.
    8. Be sure to use the correct mailing address (PO Box 8918).
    9. Do not send Schedule CC with Form W-RA. Only use Form W-RA to paper file required attachments when Schedule CC is filed electronically.
    10. Unless requested by DOR, do not include a cover letter.
  7. What trusts must file Wisconsin fiduciary returns?

    • A Wisconsin trust must file a Wisconsin fiduciary return if it has (a) any taxable income for the taxable year, or (b) gross income of $600 or more, regardless of the taxable income.

      Gross income means all income, before deducting expenses, reportable to Wisconsin which is received in the form of money, property, or services. It does not include items which are exempt from Wisconsin tax.

      Example: A trust has $400 of interest income. It makes no distributions and therefore only has an exemption of $100, which would result in taxable income of $300.

    • A nonresident trust must file a Wisconsin fiduciary return if it has (a) any Wisconsin taxable income for the year, or (b) gross income from Wisconsin sources of $600 or more, regardless of the taxable income.

      Wisconsin source income includes income or gain from:

      1. Real or tangible personal property located in Wisconsin.
      2. A business, trade, profession, or occupation carried on within Wisconsin, including a corporation taxed under Subchapter S of the Internal Revenue Code.
      3. Personal or professional services performed in Wisconsin either as an individual or as a member of a partnership or limited liability company.
      4. Income received from the Wisconsin state lottery or a multijurisdictional lottery if the winning lottery ticket or lottery share was purchased from a Wisconsin retailer.
    • If a qualified funeral trust makes the election under Internal Revenue Code section 685 for federal income tax purposes, that election applies for Wisconsin income tax purposes.
    • Electing small business trusts (ESBTs) may be S corporation shareholders. The portion of an ESBT that consists of stock of one or more S corporations is treated as a separate trust. The separate trust is subject to Wisconsin income tax at the highest rate.

    Resident Trust

    A trust created by a decedent's will (testamentary trust) is resident at the domicile of the decedent at the time of the decedent's death, unless transferred by a court having jurisdiction to another court's jurisdiction.

    Inter vivos trusts that are made irrevocable and were administered in Wisconsin before October 29, 1999, shall be considered resident at the place where the trust is being administered.

    The following inter vivos trusts that become irrevocable on or after October 29, 1999, or that became irrevocable before October 29, 1999, and are first administered in Wisconsin on or after October 29, 1999, are resident of Wisconsin:

    • Trusts, or portions of trusts, the assets of which consist of property placed in the trust by a person who is a resident of Wisconsin at the time that the property was placed in the trust if, at the time that the assets were placed in the trust, the trust was irrevocable.
    • Trusts, or portions of trusts, the assets of which consist of property placed in the trust by a person who is a resident of Wisconsin at the time that the trust became irrevocable if, at the time that the property was placed in the trust, the trust was revocable.

    A trust is revocable if the person whose property constitutes the trust may revest title to the property in that person.

    A trust is irrevocable if the power to revest title does not exist.

    Examples:

    Law prior to October 29, 1999:

    • John Doe, a resident of Wisconsin, set up an irrevocable trust on October 22, 1999, in Wisconsin that is to be administered in Wisconsin. The trust will be taxable to Wisconsin.
    • Jack Doe, a resident of Wisconsin, set up an irrevocable trust on October 22, 1999, in Florida that is to be administered in Florida. The trust will not be taxable to Wisconsin.
    • Mary Doe, a resident of Florida, set up an irrevocable trust on October 22, 1999, in Wisconsin that is to be administered in Wisconsin. The trust will be taxable to Wisconsin.
    • James Taxpayer, a resident of Wisconsin, set up a grantor (revocable) trust in Arkansas that is to be administered in Arkansas. The trust became irrevocable at his death on October 22, 1999. James was a Wisconsin resident at death. This trust will not be subject to Wisconsin income tax.
    • Susan Taxpayer, a resident of Wisconsin, has an irrevocable trust that is administered in Florida. On October 22, 1999, she made an irrevocable gift to the trust of her company stock. The earnings on the stock, if taxable at the trust level, would not be taxable to Wisconsin.
    • Martha Doe, a resident of Wisconsin, set up an irrevocable trust administered in Wisconsin in 1997. Martha moved to Florida on October 22, 1999, established Florida residency, and moved her trust to Florida. The trust would no longer be taxable to Wisconsin as the trust would now be administered in Florida.

    Law change effective on October 29, 1999:

    • John Doe, a resident of Wisconsin, set up an irrevocable trust on December 15, 1999, in Wisconsin that is to be administered in Wisconsin. The trust will be taxable to Wisconsin.
    • Jack Doe, a resident of Wisconsin, set up an irrevocable trust on December 15, 2005, in Florida that is to be administered in Florida. The trust will be taxable to Wisconsin. The trust will continue to be taxable to Wisconsin even if Jack Doe changes his domicile to another state.
    • Mary Doe, a resident of Florida, set up an irrevocable trust on December 15, 2005, in Wisconsin to be administered in Wisconsin. The trust would not be taxable to Wisconsin since Mary Doe was not a Wisconsin resident at the time the trust became irrevocable.
    • James Taxpayer, a resident of Wisconsin, set up a grantor (revocable trust) in Arkansas that is administered in Arkansas. The trust became irrevocable on James's death on December 15, 2005; James was a Wisconsin resident at the time of death. The trust would be taxable to Wisconsin.
    • Susan Taxpayer, a resident of Wisconsin, has an irrevocable trust that has been administered in Florida since 1998. On December 15, 2005, she made an irrevocable gift to the trust of $2 million of her company stock. The value of the assets in the trust are $1.5 million before the gift and $3.5 million after. All income from the $2 million which was placed in the trust on December 15, 2005, will be taxable to Wisconsin. The assets put into the trust prior to October 29, 1999, will not be taxable to Wisconsin.
    • Martha Doe, a resident of Wisconsin, set up an irrevocable trust in Wisconsin on December 15, 1999. In March 2005, Martha moved to Florida and became a Florida resident. The trust would remain taxable to Wisconsin since Martha Doe was a resident of Wisconsin at the time the trust became irrevocable.

    Effectively, this law change subjects any and all trusts and contributions to trusts by a Wisconsin resident that become irrevocable on or after October 29, 1999, to Wisconsin income tax while exempting all irrevocable trusts of a nonresident being administered in Wisconsin from Wisconsin income tax.

  8. Where do I file a trust's fiduciary return?

    If making a payment or filing with a request for a Fiduciary Closing Certificate, mail the return to:

    Wisconsin Department of Revenue
    P.O. Box 8918
    Madison, WI 53708-8918

    Mail all other trust returns to:

    Wisconsin Department of Revenue
    P.O. Box 8955
    Madison, WI 53708-8955

  9. I received an inheritance from my aunt. Do I have to report it as income on my income tax return?

    An inheritance is generally not subject to income tax since the deceased has already paid income tax on the money.

    Any income earned after your aunt's death would be taxable to the estate. If the inheritance or part of the inheritance is subject to income tax, you will receive a form (usually a Schedule K-1) from the estate telling you how much income to report and where to report it on your federal and state income tax returns.

    Examples of inherited property not subject to income tax are stock, bank accounts, life insurance proceeds, and real estate.

    Examples of inherited property that may be subject to income tax are individual retirement accounts (IRAs), dividends paid on stock, interest paid on bank accounts, or installment payments on a land contract received after your aunt's death.

FOR MORE INFORMATION PLEASE CONTACT:

WISCONSIN DEPARTMENT OF REVENUE
Estate and Fiduciary Assistance
Mail Stop 5-144
P.O. Box 8906
Madison, WI 53708-8906
Phone: (608) 266-2772
Fax: (608) 267-0834
Email Additional Questions

Last updated January 22, 2014