1. I was rated as having a 100% service-connected disability by the federal Veterans Administration (VA) in 2017 and now qualify for the credit. If the VA backdated my claim, may I claim the credit for a prior year?

  2. My spouse was a disabled veteran who qualified for the credit. My spouse died during the year. I am now the unremarried surviving spouse. How do I claim the credit?

  3. I am a disabled veteran and qualify for the credit. How does the credit apply if I have a state income tax liability?

  4. I just found out about the credit and would have been eligible to claim it before this year. Can I claim the credit for one or more prior years? How far back can I claim the credit and how do I claim it?

  5. Is there a deadline for claiming the credit?

  6. What do I have to attach to my Wisconsin income tax return when claiming the credit?

  7. Is the amount of my veterans and surviving spouses property tax credit taxable on my income tax return for the year in which I receive it?

  8. I had a 100% disability rating and qualified for the veterans and surviving spouses property tax credit for 2015 and 2016. My disability rating was reduced on June 1, 2017, and I no longer qualify for the credit. Can I claim the credit on my 2017 Wisconsin income tax return?


  1. I was rated as having a 100% service-connected disability by the federal Veterans Administration (VA) in 2017 and now qualify for the credit. If the VA backdated my claim, may I claim the credit for a prior year?

    The Wisconsin Department of Veterans Affairs (WDVA) must determine your eligibility for prior years.

    If the WDVA verified your eligibility for a prior year, you may claim the credit on an amended return. Amended returns for years prior to 2015 are filed on Form 1X. Amended returns for tax years beginning on or after January 1, 2015, are filed on the same form on which your original return was filed (for example, Form 1 or Form 1A). Amended returns must be filed within four years of the original due date of the return. For example, an amended return for 2013 (originally due April 15, 2014) must be filed on or before April 15, 2018.

  2. My spouse was a disabled veteran who qualified for the credit. My spouse died during the year. I am now the unremarried surviving spouse. How do I claim the credit?

    You must first contact the WDVA to obtain verification of your eligibility for the credit. After you receive the verification, you claim the credit on your Wisconsin income tax return. You must attach a copy of the verification to your return.

  3. I am a disabled veteran and qualify for the credit. How does the credit apply if I have a state income tax liability?

    The credit will first be applied against any state income tax liability. It will then be applied against any delinquent state and federal taxes, debts owed to other state agencies (for example, delinquent child support), and debts owed to municipalities, if any. Any excess amount will then be refunded.

  4. I just found out about the credit and would have been eligible to claim it before this year. Can I claim the credit for one or more prior years? How far back can I claim the credit and how do I claim it?

    You must first contact the WDVA for verification of your eligibility. If you are eligible to claim the credit for one or more prior years for which you have already filed a Wisconsin income tax return, you may file an amended Wisconsin return to claim the credit. Amended returns for years prior to 2015 must be filed on Form 1X. Amended returns for tax years beginning on or after January 1, 2015, are filed on the same form on which your original return was filed (for example, Form 1 or Form 1A). An amended return must be filed within four years of the original due date of the return. For example, a return for 2013 was due April 15, 2014. Amended 2013 returns must be filed on or before April 17, 2018.

    Note: If you are amending a prior year return to claim the veterans and surviving spouses property tax credit, you must also delete any school property tax credit, homestead credit, or farmland preservation credit claimed for that prior year. You are not allowed these credits if you are claiming the veterans and surviving spouses property tax credit.

  5. Is there a deadline for claiming the credit?

    The veterans and surviving spouses property tax credit must be claimed within four years of the unextended due date of the Wisconsin income tax return. For example, the 2013 Wisconsin income tax return was due April 15, 2014. The 2013 veterans and surviving spouses property tax credit must be claimed by April 17, 2018.

  6. What do I have to attach to my Wisconsin income tax return when claiming the credit?

    When claiming the veterans and surviving spouses property tax credit on the Wisconsin income tax return, you must attach to your income tax return a copy of the verification of your eligibility that you receive from the Wisconsin DVA and a copy of your property tax bills showing the amount of taxes paid during the year. A copy of the verification must be attached only to the return for the first year for which you are claiming the credit.

  7. Is the amount of my veterans and surviving spouses property tax credit taxable on my income tax return for the year in which I receive it?

    Federal treatment:

    The amount of the credit may be taxable for federal income tax purposes. The credit is considered a refund of property taxes (real estate taxes).

    If you itemized deductions for federal tax purposes on Schedule A and claimed a deduction for the amount of real estate taxes paid, the amount of veterans and surviving spouses property tax credit received during the year is taxable on your federal income tax return to the extent you received a tax benefit from the deduction.

    If you did not itemize deductions for federal tax purposes, the amount of veterans and surviving spouses property tax credit received during the year is not taxable on your federal income tax return.

    Example 1:

    You paid real estate taxes of $3,000 on your principal residence in 2017. You claimed the veterans and surviving spouses property tax credit of $3,000 which was refunded to you when you filed your Wisconsin income tax return in 2018. You deducted the $3,000 as a federal itemized deduction on your 2017 Schedule A. Your total itemized deductions were $8,000. Your federal standard deduction for 2017 would have been $6,300. Therefore, your tax benefit from the itemized deductions was $1,700 ($8,000 less $6,300). The $1,700 must be reported as income on your 2018 federal income tax return as a recovery of an itemized deduction.

    Example 2:

    The facts are the same as in Example 1 except that your total itemized deductions were $10,000 for 2017. Your tax benefit from the itemized deductions was $3,700 ($10,000 less $6,300). The entire $3,000 must be reported as income on your 2018 federal income tax return as a recovery of an itemized deduction.

    Note: Use Worksheet 2 in federal Publication 525, Taxable and Nontaxable Income, to determine the taxable amount of your veterans and surviving spouses property tax credit. Contact the federal Internal Revenue Service (IRS) if you have questions about the federal treatment of the credit. The IRS toll–free number is 1–800–829–1040.

    Wisconsin treatment:

    The amount of the veterans and surviving spouses property tax credit is not income on your Wisconsin income tax return. Wisconsin law allows a subtraction from federal adjusted gross income for any amounts that are recoveries of federal itemized deductions for which no tax benefit was received. Because no deduction has been allowed for property taxes and the property taxes cannot be used in the computation of the Wisconsin itemized deduction credit, no tax benefit was received for Wisconsin income tax purposes.

  8. I had a 100% disability rating and qualified for the veterans and surviving spouses property tax credit for 2015 and 2016. My disability rating was reduced on June 1, 2017, and I no longer qualify for the credit. Can I claim the credit on my 2017 Wisconsin income tax return?

    Yes, you may claim the credit on your 2017 Wisconsin income tax return based on property taxes you paid on your principal residence during the period January 1 through May 31, 2017. Taxes paid on your principal residence after May 31, 2017, cannot be claimed for the veterans and surviving spouses property tax credit.


FOR MORE INFORMATION PLEASE CONTACT:

MS 5-77
WISCONSIN DEPARTMENT OF REVENUE
Customer Service Bureau
PO Box 8949
Madison, WI 53708-8949
Phone: (608) 266-2486
Fax: (608) 267-1030
Email additional questions to DORIncome@wisconsin.gov

December 14, 2017