Wis. Admin. Code § Tax 14.06 — Marriage, separation or divorce during a claim year

Tax 14.06(1) (1) Purpose. This section describes the qualifications for a homestead credit and the computation of household income, property taxes accrued and rent constituting property taxes accrued of a claimant who becomes married or divorced during the year to which a homestead credit claim relates or whose spouse occupies a separate dwelling for any part of a claim year.

Tax 14.06(2) (2) Marriage during a claim year.

Tax 14.06(2)(a) (a) A new household is established when a marriage occurs during a claim year and the spouses reside together after the marriage. Under s. 71.53 (1) (c) , Stats., either the husband or the wife may claim a homestead credit for the year of the marriage but not both.

Tax 14.06(2)(b) (b) Under s. 71.52 (5) , Stats., when a marriage occurs during a claim year and the spouses reside together after the marriage, household income shall include the claimant’s income for the portion of the calendar year prior to the marriage and the total income of the household for the remainder of the year after the marriage.

Tax 14.06(2)(c) (c) Under s. 71.52 (7) and (8) , Stats., the spouse filing a claim may claim property taxes accrued or rent constituting property taxes accrued for the homestead of the claimant for the portion of the year prior to a marriage plus the total of those amounts for the common homestead after the marriage.

Tax 14.06(3) (3) Separation or divorce during a claim year.

Tax 14.06(3)(a) (a) If a husband and wife occupy separate homesteads for all or part of a claim year and continue to occupy separate homesteads on December 31 of that year, or if a husband and wife become divorced during a claim year and do not remarry each other by December 31 of that year, each may claim a homestead credit for that year if otherwise qualified, since 2 households exist at the end of the year. When one spouse has permanently moved into a nursing home and the other spouse remains at home, the husband and wife are considered to occupy separate dwellings at the end of the year.

Tax 14.06(3)(b) (b) If a husband and wife occupy separate homesteads for part of a claim year but occupy the same homestead on December 31 of that year, only one of the spouses may claim a homestead credit for that year, since only one household exists at the end of the year.

Tax 14.06(3)(c) (c) In the event a husband and wife occupy separate dwellings or become divorced during a claim year, household income is determined under s. 71.52 (5) , Stats., under Wisconsin income tax law and under marital property law as provided in ch. 766 , Stats., except that marital property law does not apply if one of the spouses is not domiciled in Wisconsin during the period of time they occupy separate dwellings. Household income shall be determined as follows:

Tax 14.06(3)(c)1. 1. For the period of time the claimant and the claimant’s spouse occupy a common homestead as members of the same household, household income shall include all income of both spouses, even if the “innocent spouse” provisions as provided in s. 71.10 (6) (b) and (6m) , Stats., are in effect for income tax purposes. If the claimant cannot exactly determine the income of the claimant’s spouse during the portion of the year they occupy a common homestead, the claimant may make a reasonable estimate of the income and shall clearly indicate it as an estimate on the homestead credit claim.

Tax 14.06(3)(c)2. 2. For the period of time the claimant and the claimant’s spouse occupy separate dwellings prior to the issuance of a divorce decree, household income shall include all of the claimant’s income and none of the spouse’s income, if the spouse is not domiciled in Wisconsin during that time. If the claimant’s spouse remains a Wisconsin domiciliary during the period of time the claimant and the claimant’s spouse occupy separate dwellings prior to the issuance of a divorce decree, household income shall include all non-marital property income of the claimant and the claimant’s portion of marital property income as provided by marital property law, ch. 766 , Stats., and by the “innocent spouse” provisions in s. 71.10 (6) (b) and (6m) , Stats. Under marital property law and the “innocent spouse” provisions, the extent to which marital property income during the period of time the spouses occupy separate dwellings is includable in household income depends on whether the claimant and the claimant’s spouse notify each other of the amount and nature of marital property income generated by each, as follows:

Tax 14.06(3)(c)2.a. a. If both spouses notify each other, 1 / 2 of all marital property income of both spouses is includable.

Tax 14.06(3)(c)2.b. b. If the claimant notifies the spouse but the spouse does not notify the claimant, 1 / 2 of the marital property income generated by the claimant’s services and property and none of the marital property income generated by the spouse’s services and property is includable.

Tax 14.06(3)(c)2.c. c. If the claimant does not notify the spouse but the spouse notifies the claimant, all of the marital property income generated by the claimant’s services and property and 1 / 2 of the marital property income generated by the spouse’s services and property is includable.

Tax 14.06(3)(c)2.d. d. If neither spouse notifies the other, all of the marital property income generated by the claimant’s services and property and none of the marital property income generated by the spouse’s services and property is includable.

Tax 14.06(3)(c)3. 3. For the portion of the year after a divorce, household income shall include all income of the claimant only.

Tax 14.06(3)(d) (d) In order to be valid, the notification referred to in par. (c) must be made by the spouse whose services or property produced the marital property income, prior to the due date of the Wisconsin income tax return, or if the allowable time for filing the Wisconsin income tax return has been extended, the extended due date.

Tax 14.06(3)(e) (e) In the event a husband and wife occupy separate dwellings during all or part of a claim year or become divorced during a claim year, each spouse may claim the total amount of property taxes accrued or rent constituting property taxes accrued on the common Wisconsin homestead for the portion of the year they maintain that homestead plus their own amounts for the portion of the calendar year the spouses occupy separate dwellings or are not married to each other. However, as provided in par. (b) , only one of the spouses may claim a homestead credit if they are not divorced or do not occupy separate dwellings on December 31 of that year.

Tax 14.06(4) (4) Divorce and remarriage during a claim year.

Tax 14.06(4)(a) (a) If during a claim year a person occupies a separate dwelling from his or her spouse, is subsequently divorced, and is remarried to a different spouse and resides with the spouse after the marriage, a new household is established by the person and the new spouse. Under s. 71.53 (1) (c) , Stats., either of the new spouses may claim a homestead credit for the year of the marriage but not both.

Tax 14.06(4)(b) (b) In the event that during a claim year a claimant occupies a separate dwelling from one spouse, is divorced from that spouse, and is remarried to a new spouse, household income with respect to the claimant and the former spouse for the portion of the claim year prior to the claimant’s remarriage shall be determined as described in sub. (3) (c) and (d) . For the portion of the claim year the claimant occupies a common homestead with the new spouse after the remarriage, household income shall include all income of both the claimant and the new spouse.

Tax 14.06(4)(c) (c) In the event a claimant occupies a separate dwelling from his or her former spouse, is divorced, and is remarried during a claim year, the claimant may claim the total amount of property taxes accrued or rent constituting property taxes accrued on each common homestead for the portion of the year the claimant occupies a common homestead with a spouse, plus the claimant’s share of property taxes accrued or rent constituting property taxes accrued for the portion of the calendar year the claimant occupies a separate dwelling from his or her spouse or is not married.