Pub 122 Tax Information for Part-Year Residents and …

1 Tax Information for Part-Year Residents and Nonresidents of wisconsin for 2021 (Including Information for Aliens) Publication 122 (2/22) TABLE OF CONTENTS Page 1. INTRODUCTION .. 5 2. DEFINITIONS .. 5 3. FILING REQUIREMENTS .. 6 A. Who Must File a wisconsin Income Tax Return? .. 6 B. What Income Does wisconsin Tax? .. 7 (1) Part-Year Residents .. 7 (2) Nonresidents .. 7 (3) Income from wisconsin 7 C. Which Form to File? .. 8 4. INCOME, DEDUCTIONS, AND CREDITS .. 8 A. Wages, Salaries, Tips, and Other Employee Compensation .. 8 (1) Part-Year Residents of wisconsin .. 8 (2) Nonresident of wisconsin .. 8 (3) Exceptions .. 9 (a) Reciprocity for Residents of Illinois, Indiana, Kentucky, and Michigan.

2 9 (b) Military personnel stationed in wisconsin .. 9 (c) Income of military spouse .. 9 (d) Members of the Reserves or National Guard .. 10 (e) Armed Forces active duty pay .. 10 (f) Disaster relief work .. 10 (g) Nonresident railroad employees, motor carrier transportation employees, air carrier employees, and interstate waterway workers .. 10 (4) Allocating income earned as an employee to wisconsin .. 11 (5) Stock options .. 12 (a) Resident of wisconsin when income is recognized .. 12 (b) Not a resident of wisconsin when income is recognized .. 12 (6) Nonresident members of professional athletic teams .. 13 B. Scholarships and Fellowships .. 13 C. Business Income .. 14 Gains and Losses and Sales of Business Assets.

3 15 (1) Part-Year Residents of wisconsin .. 15 (2) Nonresidents of wisconsin .. 15 (3) Capital gain or loss from wisconsin sources .. 15 (4) Sale of your main home .. 16 (5) Installment sales .. 16 (a) Reporting taxable gain from an installment sale of property by individuals who move into wisconsin .. 16 (b) Reporting taxable gain from an installment sale of property by individuals who abandon their wisconsin domicile .. 17 (6) Sale of an installment obligation .. 17 (7) Involuntarily converted property and like-kind exchanges .. 17 (8) Gain or loss on sale of assets acquired before becoming a wisconsin resident .. 18 (9) Sale of a partnership interest by a nonresident .. 18 (10) Partnership sale of assets.

4 19 E. IRA Distributions, Pensions, and Annuities .. 20(1) Distributions received while a wisconsin resident .. 20 (2) Distributions received from qualified plans by a nonresident of wisconsin .. 20 (3) Distributions received from nonqualified deferred compensation plans .. 21 (4) Penalties on retirement plans, Coverdell education savings accounts, ABLE accounts, and medical savings accounts .. 22 F. Losses .. 22 (1) Net operating losses .. 22 (2) Passive 22 G. Gambling Winnings .. 23 (1) Part-Year resident of wisconsin .. 23 (2) Nonresident of wisconsin .. 23 (3) Withholding on gambling winnings .. 24 H. Unemployment Compensation and Supplemental Unemployment Benefits .. 24 (1) Part-Year resident of wisconsin .

5 24 (2) Nonresident of wisconsin .. 24 I. Moving Expense .. 24 J. Standard Deduction .. 25 K. Deduction for Exemptions .. 25 L. Credits .. 26 (1) wisconsin itemized deduction credit .. 26 (2) School property tax credit .. 27 (3) Married couple credit .. 27 (4) Earned income credit .. 27 (5) Farmland preservation credit .. 28 (6) Credit for net income tax paid to another state .. 28 (7) Homestead credit .. 29 (8) Development zones credits .. 30 (9) Historic rehabilitation credits .. 30 (10) Repayment credit .. 30 (11) Working families tax credit .. 30 (12) Venture capital credits .. 31 (13) Veterans and surviving spouses property tax credit .. 31 (14) Enterprise zone jobs credit .. 31 (15) Manufacturing investment credit.

6 31 (16) Economic development tax credit .. 31 (17) Jobs tax credit .. 32 (18) Community rehabilitation program credit .. 32 (19) Manufacturing and agriculture credit .. 32 (20) Research expense credits .. 32 (21) Business development credit .. 33 (22) Electronics and Information technology manufacturing zone credit .. 33 (23) Employee college savings account contribution credit .. 33 (24) Low-income housing credit .. 33 M. Withholding From Pass-Through Entities .. 34 TABLE OF CONTENTS (CONT.) 5. ESTIMATED TAX PAYMENT REQUIREMENTS .. 35 6. ALIENS .. 36 A. Federal Resident Status .. 36 B. wisconsin Resident Status .. 36 C. Who Must File a wisconsin Income Tax Return? .. 37 D. Filing Status .. 37 (1) Single.

7 37 (2) Married filing joint return .. 38 (3) Married filing separate return .. 38 (4) Head of household .. 38 E. Tax Treaties .. 39 F. Completing Form 1 NPR When You Are a Nonresident Alien or Have a Dual Status .. 39 (1) Persons who file federal Form 1040NR .. 39 (2) Social security number .. 39 (3) St andard deduction .. 40 (4) Deduction for exemptions .. 40 (5) wisconsin itemized deduction credit .. 41 7. ADDITIONAL Information .. 41 A. IRS Adjustments and Amended Returns .. 41 B. wisconsin Forms and Publications .. 41 C. Federal Forms and Publications .. 42 Tax Information for Part-Year Residents and Nonresidents of wisconsin for 2021 Publication 122 Back to Table of Contents 5 1. INTRODUCTION This publication provides Information about the wisconsin income tax treatment of individuals who are Part-Year Residents or nonresidents of wisconsin .

8 It is intended to supplement the instructions for Form 1 NPR, which is the wisconsin income tax return for nonresidents and Part-Year Residents of wisconsin . 2. DEFINITIONS Full-year resident You are a full-year resident if you are domiciled in wisconsin for the entire taxable year. Part-Year resident You are a Part-Year resident if you are domiciled in wisconsin for part of the taxable year. Nonresident You are a nonresident if you are not domiciled in wisconsin for any part of the taxable year. Domicile Your domicile is the permanent legal home you intend to use for an indefinite or unlimited period, and to which, when absent, you intend to return. It is not always where you presently live. You can be physically present or residing in one state but maintain a domicile in another.

9 "Domicile" is often referred to as "legal residence." You can have only one domicile at a time. Your domicile, once established, is never changed unless all three of the following occur or exist: You specifically intend to abandon your old domicile and take actions that show that intent You intend to acquire a new domicile and take actions that show that intent You are physically present in the new domicile Your domicile does not change if: You leave your state of domicile for a brief rest or vacation, or You leave your state of domicile to complete a particular transaction, perform a particular contract, or fulfill a particular engagement, but you intend to return to your state of domicile whether or not you complete the transaction, contract, or engagement.

10 Example 1: You are a legal resident of Texas. In 2021, you worked in wisconsin for three months after which you returned to Texas. You did not take any steps to abandon your Texas residence (domicile). You are a nonresident of wisconsin for 2021. Example 2: You graduated from high school in Minnesota where you lived with your parents. In August of 2021, you moved to wisconsin to attend the University of wisconsin . You do not plan to remain in wisconsin after you complete your course of study at the university. You do not take any steps to abandon your Minnesota residence or to acquire a new residence in wisconsin . You are a nonresident of wisconsin for 2021. IMPORTANT CHANGES Use this publication in preparing your 2021 tax return.