Manufacturing and Agriculture Credit - J. Limitation When Credit for Tax Paid to Other State is Claimed

  1. What is the new qualified production activities income limitation and when is it effective?

  2. How does a shareholder of a tax-option (S) corporation or partner of a partnership report the qualified production activities income limitation on Schedule MA-M or MA-A?

  3. How does a tax-option (S) corporation or partnership report the qualified production activities income limitation on Schedule MA-M or MA-A?

  4. Can a taxpayer elect to not claim the credit for tax paid to other states (TPOS credit) and claim the full amount of eligible qualified production activities income (QPAI) to compute the manufacturing and agriculture tax credit?

  5. If a taxpayer has qualified production activities income (QPAI) and other income taxable in another state, can the taxpayer claim the credit for taxes paid to other state (TPOS credit) using only the other income?

  6. Is Part II of Schedules MA-M and MA-A used to limit the manufacturing and agriculture credit when the same qualified production activities income (QPAI) is used to compute credit for tax paid to other states (TPOS)?

  7. The pass-through entity did not provide me with the amount of pass-through income that is considered qualified production activities income (QPAI). If the Wisconsin apportionment percentage is 16%, may I use the inverse of the Wisconsin apportionment percentage (84%) to reduce the QPAI for the amount used to claim the TPOS credit?

  8. How do I compute the following?

    1. The qualified production activities income (QPAI) limitation when the tax-option (S) corporation or partnership derives income from the sale of QPAI that is taxed at both the individual and entity level in multiples states.

    2. The credit for taxes paid to other state (TPOS credit) using non-QPAI.

  9. Using the facts from above, how is the qualified production activities income (QPAI) limitation computed if the shareholder's ownership percentage is 30%?

  10. If a tax-option (S) corporation pays an entity-level income or franchise tax to another state, is the credit for taxes paid to the other state (TPOS credit) limited to the taxpayer's Wisconsin net tax multiplied by a ratio of the taxpayer's income subject to tax in Wisconsin and the other state to the taxpayer's Wisconsin adjusted gross income?


FOR QUESTIONS OR COMMENTS CONTACT:

WISCONSIN DEPARTMENT OF REVENUE
Corporation Franchise/Income Tax Assistance
PO Box 8906
Madison, WI 53708-8906
Phone: (608) 266-2772
Fax: (608) 267-0834
Email additional questions to DORFranchise@wisconsin.gov

February 1, 2019