Wis. Admin. Code Department of Revenue Tax 14.05
Example: A claimant files a claim with a rent certificate showing rent paid for occupancy of $7,200, or $600 per month. Investigation by the Department of Revenue discloses the rent is too high for the locality and dwelling involved, and the landlord is financially dependent on others for support and is related to the claimant. The department determines that the fair rental value of the claimant's homestead for the year of the claim was $300 per month, or $3,600 for the year. No utilities, food or services were furnished by the landlord.
Allowable rent constituting property taxes accrued is $900, which is 25% of $3,600.
Example: X, Y, and Z are 3 unrelated joint occupants of a rental unit who share expenses as follows:
Living Expenses | X | Y | Z | Total |
Rent for occupancy | $5,400 | $ - | $ - | $5,400 |
Food | - | 1,350 | 1,350 | 2,700 |
Utilities | - | 900 | - | 900 |
Total living expenses | $5,400 | $2,250 | $1,350 | $9,000 |
% of total | 60% | 25% | 15% | 100% |
Since X paid 60% of the shared living expenses, X's share of rent paid for occupancy is 60% of $5,400, or $3,240. Likewise, rent paid for occupancy for Y is 25% of $5,400, or $1,350, and for Z it is 15% of $5,400, or $810. Total rent paid for occupancy for all 3 claimants is $5,400, as shown on the rent for occupancy line.
Example: A sharecropper resides on and operates a 120 acre dairy farm. The landlord and the sharecropper share equally the gross receipts from crop sales, $10,000, the gross milk receipts, $40,000, and the cost of seed and feed, $20,000. The landlord furnishes the land, buildings and machinery, for which annual allowable depreciation is $6,000. The landlord pays for the heat. In this situation, rent constituting property taxes accrued for the sharecropper equals 20% of the owner's share of the proceeds less the value of the nonoccupancy items furnished by the landlord, as follows:
Landlord's share of crop receipts | $ 5,000 | |
Landlord's share of milk receipts | 20,000 | $ 25,000 |
Less nonoccupancy items furnished by landlord: | ||
Landlord's share of seed and feed | $ 10,000 | |
Depreciation of buildings (not including the dwelling) and machinery | 6,000 | 16,000 |
Gross rent | $ 9,000 x20% | |
Rent constituting property taxes accrued | $ 1,800 |
Example: A total of $5,400 is paid to a claimant's landlord for the year on behalf of the claimant, $1,800 by the claimant and $3,600 by a governmental agency. The value of food provided in $600 and no services are provided.
Qualifying rent paid for occupancy is $1,600, computed as follows: $4,800×[$1,800÷$5,400]. The $4,800 is the total amount paid, $5,400, less the $600 for food. The $1,800 is the amount the claimant paid and the $5,400 is the total amount paid.
Example: Example: The following formula may be used to compute a resident's rent paid for occupancy; the worksheet is filled in as an example of how to compute the percentage:
a. Property taxes | $ 30,000 |
b. Interest | 70,000 |
c. Lease or rent expenses | 10,000 |
d. Depreciation | 60,000 |
e. Upkeep and repairs | 10,000 |
f. Utilities | 20,000 |
g. Total building occupancy expenses | $ 200,000 |
2. Gross income, including indirect payments | $1,600,000 |
3. Line 1.g divided by line 2 equals the percentage rate | 12.5% |
The percentage rate determined above is to be multiplied by the total rent collected as entered on the rent certificate prepared for a resident filing a homestead credit claim, and the amount so determined is to be entered on the rent certificate as rent paid for occupancy. Assuming a resident's total direct payments for the year were $36,000, rent paid for occupancy would be $4,500, which is 12.5% of $36,000
Wis. Admin. Code Department of Revenue Tax 14.05
The computation of rent constituting property taxes accrued of a claimant who becomes married or divorced during a claim year or occupies a separate dwelling from his or her spouse for any part of a claim year is described in s. Tax 14.06.
Section Tax 14.05 interprets ss. 71.52(2) and (8), 71.53(2) (e) and (f), 71.54(2) (a) and (c) and 71.55(2) and (8), Stats.
Section 71.54(2) (a) (intro.), Stats., was amended by 1995 Wis. Act 27, effective July 28, 1995, to reference "relief from any county under s. 59.07(154)," Stats. (s. 59.07(154), Stats., was renumbered s. 59.53(21), Stats., by 1995 Wis. Act 201, effective September 1, 1996). Section 71.54(2) (a) (intro.), Stats., was again amended, by 1995 Wis. Act 289, effective July 1, 1996, to provide for a one-twelfth reduction of rent constituting property taxes accrued for months a claimant received Wisconsin works under s. 49.147(4) or (5), Stats. Prior to the enactment of 1995 Wis. Acts 27 and 289, the county relief reference was to "general relief from any municipality or county," and there was no reference to Wisconsin works because that program did not exist.
Section 71.54(2) (a) (intro.), Stats., was amended by 1999 Wis. Act 9, effective for 2000 homestead credit claims filed in calendar year 2001 and thereafter, to require a one-twelfth reduction of rent constituting property taxes accrued for months a claimant received Wisconsin works payments as a caretaker of a newborn child under s. 49.148(1m), Stats. Under the statutes in effect immediately prior to the enactment of 1999 Wis. Act 9, the reduction was not required for receipt of those payments.
The standard rate of $100 per week for rent paid for occupancy by residents of nursing homes or long-term care facilities became effective with rent paid for calendar year 2000. For rent paid for calendar years 1999 and prior, the standard rate was $40 per week.