Wisconsin Job Creation Deduction

Effective for taxable years beginning after December 31, 2010 and before January 1, 2015

  1. What is the job creation deduction?

  2. What are the definitions of "full-time equivalent employee", "employee" and "related entity"?

  3. How do I determine the increase in the number of full-time equivalent (FTE) employees employed in Wisconsin?

  4. On what form is the job creation deduction claimed?

  5. May a new business claim the job creation deduction?

  6. One company acquires another company and retains their workforce. May a job creation deduction be claimed for these acquired employees?

  7. Can an owner or family member be an FTE employee?

  8. Does the definition of an FTE employee, include a related persons or related entities provision?

  9. Does a worker hired through a professional employer organization qualify as an FTE employee?

  10. An employee is required to work 1,950 hours per year (37.5 hours per week) rather than 2,080 hours. Does the employee qualify as an FTE employee?

  11. Do ten part-time employees required to work 1,040 hours per year count as five FTE employees?

  12. Does a job sharing position qualify as an FTE employee?

  13. Do three seasonal employees working full-time for four months of the year qualify as one FTE employee?

  14. A newly hired employee is expected to work 2,080 hours per year. Does the employee qualify as an FTE employee?

  15. An employee is required to work 1,664 hours per year (32 hours per week). Due to other staff shortages, the employee actually worked 2,080 hours in the year. Does the employee qualify as an FTE employee?

  16. How does an unpaid leave of absence affect the number of FTE employees?

  17. My business is located near the border of Wisconsin and I hired an employee who is resident of another state. Does the employee qualify as an FTE employee?

  18. A construction company needs heavy machinery operating services for a nine month project. At the beginning of the tax year, the company receives a union operator from the local union pool. The operator is added to the company's payroll and is required to work 60 hours a week for 37 weeks until the project ends. Does the employee qualify as an FTE employee?

  19. A salaried employee is required to work at least 2,080 hours per year, including paid leave and holidays. The employee is a traveling account manager for seasonal sport equipment. During the tax year, the employee worked 60 hours a week for 26 weeks, 24 hours a week for 24 weeks, and used 80 hours of paid leave. Is this employee considered to be working in a regular, nonseasonal job?

  20. Do overtime hours count toward the 2,080 hours per year?

  21. Our accounting firm requires that our employees work 36 hours a week during the summer months and 40 hours per week during the remainder of the year. The employees are paid for working 40 hours per week, even though they only worked 36 hours per week during the summer. Does an employee of our firm meet the definition of an FTE employee?

  22. Is an employer who changes an employee from a part-time position to a full-time position eligible for the job creation deduction for that employee?

  23. A farmer increases his or her workforce. The farmer is not required to file Quarterly Wage Reports with the Department of Workforce Development. Is the farmer eligible for the job creation deduction?

  24. Are all employees included on the Quarterly Wage Report considered FTE employees when calculating the average employee count? Is the calculation as simple as comparing the prior year average employee counts on the Quarterly Wage Reports to the current year reports?

  25. Does "required to work 2,080 hours" mean that the employer needs something in writing or is the employer's expectation enough to claim the deduction?

  26. A trucking company increases their staff by hiring additional truck drivers that are paid based on the number of miles driven during the year. Do the additional truck drivers qualify for the job creation deduction? How is a FTE employee determined when the employees are paid on a per mile basis?

  27. When is a tax-option (S) corporation with a fiscal year ending on September 30, 2011 eligible to claim the job creation deduction?

  28. I am required to file Quarterly Wage Reports for unemployment compensation purposes and also must use this information in computing the average employee count for the job creation deduction. Which periods are covered by the Quarterly Wage Reports?

  29. The definition of full-time equivalent employee for the job creation deduction is very different than any other definition of full-time employee that I've seen. Why is that?

  30. How should this deduction be treated/reported for basis and WI AAA purposes?


FOR MORE INFORMATION PLEASE CONTACT:

MS 5-77
WISCONSIN DEPARTMENT OF REVENUE
Customer Service Bureau
PO Box 8949
Madison, WI 53708-8949
Phone: (608) 266-2772
Fax: (608) 267-1030
Email additional questions to DORFranchise@wisconsin.gov

February 1, 2019