2024 Wisconsin Form 3 Instructions                                                                Page 1 

                  Table of Contents 

General Instructions for Form 3 ................................................................................................................................ 2 
 Who Must File Form 3 .............................................................................................................................................. 2 
 Definitions ................................................................................................................................................................. 3 
 When and Where to File ........................................................................................................................................... 4 
 Period Covered by Return ........................................................................................................................................ 5 
 Accounting Methods and Elections .......................................................................................................................... 5 
 Payment of Estimated Tax ....................................................................................................................................... 5 
 Disclosure of Related Entity Expenses and Reportable Transactions ..................................................................... 6 
 Internal Revenue Service Adjustments, Amended Returns, Claims for Refund, and Final Returns ....................... 7 
 Partnerships Having Nonresident Partners .............................................................................................................. 8 
 Schedules 3K-1 and Information Returns ................................................................................................................ 9 
 Wisconsin Use Tax ................................................................................................................................................... 9 
 Penalties for Not Filing or Filing Incorrect Returns ................................................................................................... 9 

Conformity with Internal Revenue Code and Exceptions ..................................................................................... 10 
 Provisions of the Internal Revenue Code Adopted by Wisconsin: ......................................................................... 10 
 Provisions of the Internal Revenue Code Not Adopted by Wisconsin: .................................................................. 11 
 Depreciation and Bonus Depreciation .................................................................................................................... 15 
 Section 179 Expense .............................................................................................................................................. 15 
 How to Report Differences ..................................................................................................................................... 15 

Specific Instructions for Form 3 .............................................................................................................................. 16 
 Items A Through M ................................................................................................................................................. 16 

Part I – Calculation of Tax Due or Refund .............................................................................................................. 18 

Part II - Schedule 3K – Partners’ Distributive Share Items ................................................................................... 21 
 Schedule 3K, Columns (b) Through (d) .................................................................................................................. 21 
 Adjustments Reportable on Schedule 3K, Column (c) ........................................................................................... 21 
 Modifications Prescribed in Wisconsin Law ........................................................................................................... 22 
 Guaranteed Payments Reported on Line 4 ............................................................................................................ 23 
 Credits Reportable on Schedule 3K, Line 15 ......................................................................................................... 23 
 “Other Items and Amounts” Reportable on Schedule 3K, Item 20c ....................................................................... 25 
 Schedule 3K, Lines 21 Through 24 ........................................................................................................................ 26 
 Third Party Designee .............................................................................................................................................. 26 
 Submitting Your Form 3 .......................................................................................................................................... 27 

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                                         2024 Wisconsin Form 3 Instructions                                                                Page 2 

Part III - Specific Instructions for Schedule 3K – Partners' Share of Additions and Subtractions .................. 27 
 Additions: ................................................................................................................................................................ 28 
 Subtractions: ........................................................................................................................................................... 30 
 Pass-Through Entity Representative ...................................................................................................................... 33 

Additional Information, Assistance, and Forms .................................................................................................... 34 
 Web Resources: ..................................................................................................................................................... 34 
 Contact Information: ............................................................................................................................................... 34 
 Obtaining Forms: .................................................................................................................................................... 34 
 Applicable Laws and Rules: ................................................................................................................................... 34 
 
General Instructions for Form 3 

                                             Important Notices 
Effective April 17, 2022, provisions in 2021 Wis. Act 262, require a partnership to designate a pass-through member 
or other person with substantial presence in the United States as the representative of the partnership. See the Pass-
Through Entity Representative section in these instructions for additional information. 
 
If a partnership makes the election to pay tax at the entity level, the partnership must check box "I" on page 1 of Form 
3 and include a completed Schedule 3-ET, Entity-Level Tax Computation, with Form 3. For additional information 
detailing the entity-level tax election, see common questions on the department's website at  revenue.wi.gov/Pages/FAQS/ise-
passthroughpartnr.aspx. 
  
Partnerships, including limited liability companies (LLCs) treated as partnerships, use Form 3 to report their income, 
gains, losses, deductions, and credits.  
 
Who Must File Form 3 

Every partnership and limited liability company treated as a partnership with income from Wisconsin sources, regard-
less of the amount, must file Form 3. For example, a partnership must file a return if it has income from: 

•  Business transacted in Wisconsin, 
•  Personal or professional services performed in Wisconsin, 
•  Real or tangible personal property located in Wisconsin, 
•  A covenant not to compete, if that covenant was based on a Wisconsin-based activity, or 
•  Wisconsin lottery prizes, including income from the sale of or purchase and subsequent sale or redemption of 
 lottery prizes if the winning tickets were originally bought in Wisconsin. 

The department may also require a partnership with Wisconsin resident partners to file a Wisconsin partnership return 
even though it has no Wisconsin business or income. For example, an out-of-state partnership that does no business 
in Wisconsin, has no property in Wisconsin, and has no income from Wisconsin sources may be requested to file a 
partnership return to enable the department to compute a Wisconsin resident partner’s Wisconsin tax liability. 

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                                       2024 Wisconsin Form 3 Instructions                                                                Page 3 

Exceptions: The following partnerships and limited liability companies are not required to file Form 3: 
•  A syndicate, pool, joint venture, or similar organization that isn’t required to file a federal partnership return because 
 it has elected sec. 761(a), of the Internal Revenue Code (IRC), not to be treated as a partnership for federal income 
 tax purposes may make a similar election for Wisconsin purposes. To make the election, include a copy of the 
 federal election statement to the Form 3 filed with the department for the year of election. 
•  If the Wisconsin election is made, the organization generally won’t have to file Form 3 except for the year of elec-
 tion. However, the department may require the organization to file a return so that a partner’s Wisconsin tax liability 
 may be computed. 
•  Publicly traded partnerships treated as corporations under sec. 7704, IRC, must file Wisconsin Form 4 or 6 instead 
 of Form 3. 
•  Limited liability companies treated as corporations for federal income tax purposes must file Wisconsin Form 4 or 
 6 instead of Form 3. 
•  Single member limited liability companies that are disregarded as separate entities under sec. 7701, IRC, are 
 disregarded as separate entities for Wisconsin purposes. The member is required to include the income and ex-
 penses of the limited liability company on the member’s return. 
•  Common trust funds are treated as fiduciaries under Wisconsin law and must file Wisconsin Form 2 instead of 
 Form 3. 

Definitions 

Partnership. A partnership is an association of two or more persons to carry on as co-owners a trade or business 
for profit. The term “partnership” includes a limited partnership, registered  limited  liability partnership, syndicate, 
group, pool, joint venture, or other unincorporated organization, through or by means of which any business, financial 
operation, or venture is carried on, and is not, within the meaning of the Wisconsin income tax law, a corporation, 
trust, estate, or sole proprietorship. 

Limited Partnership. A limited partnership is formed under a state limited partnership law and composed of at least 
one general partner and one or more limited partners. The term also includes a limited partnership whose certificate 
of limited partnership states that the partnership  is a  limited  liability limited  partnership  as provided in sec. 
179.0102(12), Wis. Stats. 

Registered Limited Liability Partnership. A registered limited liability partnership (LLP) is formed under Wisconsin 
limited liability partnership law and filed a statement of qualification under sec. 178.0901, Wis. Stats. Generally, a 
partner in an LLP isn’t personally liable for the debts of the LLP or any other partner. 

Foreign Registered Limited Liability Partnership. A foreign limited liability partnership is formed according to an 
agreement governed by the laws of a state other than Wisconsin or another country and registered under the laws of 
that jurisdiction. A foreign limited liability partnership must register with Wisconsin as provided in sec. 178.1003, Wis. 
Stats., in order to do business in Wisconsin. 

General Partner. A general partner is a partner who is personally liable for partnership debts. 

Limited Partner. A limited partner is a partner whose personal liability for partnership debts is limited to the amount 
of money or other property that the partner contributed or is required to contribute to the partnership. Note: A partner 
who has the authority to act for or bind the partnership in any way or to participate in any way in the management or 
business affairs of the partnership, or both, is deemed to be a general partner, even if the person is defined as a 
limited partner in the partnership agreement. 

Limited Liability Company. A limited liability company (LLC) is an entity formed under state law by filing articles of 
organization as an LLC. Unlike a partnership, none of the members of an LLC are personally liable for its debts. 
However, members or other persons may be personally liable for the payment of taxes based on their responsibilities 
or actions. 

An LLC may be classified for federal income tax purposes as a partnership, a corporation, or as an entity disregarded 
as a separate entity from its owner. If an LLC is classified as a partnership for federal income tax purposes, it is 

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                                         2024 Wisconsin Form 3 Instructions                                                                Page 4 

 treated as a partnership for Wisconsin purposes. An LLC classified as a corporation for federal income tax purposes 
 is treated as a corporation by Wisconsin. An LLC disregarded as a separate entity for federal income tax purposes 
 is also disregarded as a separate entity for Wisconsin income tax purposes. For more information, see          Publica-
 tion 119, Limited Liability Companies (LLCs), on the department's website, revenue.wi.gov. 

 When and Where to File 
 A partnership must file its return with the department by the 15th day of the 3 rdmonth following the close of its taxable 
 year. 

 Short Period Returns. Returns for short taxable years (periods of less than 12 months) are due on or before the 
 federal due date.  

 Be sure to use the correct year's tax return when filing for a short period. If the tax returns are not yet available, wait 
 until the returns become available and file under extension. For example, if a taxpayer has a short period from January 
 1, 2025 through March 31, 2025, the 2025 Form 3 will not be ready by June 16, 2025 (unextended due date for a 
 March 31 year-end). Wisconsin law provides for the same six-month extension period as the Internal Revenue Ser-
 vice (IRS) to file the partnership return (see Extensions below). Filing under extension will allow the correct years 
 return to be filed when the 2025 Form 3 is available (typically November 1). Note that an extension does not extend 
 the time to pay a balance due. In order to avoid interest charges, pay the amount due by the 15th day of the 3rd 
 month following the close of the taxable year. 

 Extensions. The IRS allows an extension period of six months. This same extension period applies to Wisconsin 
 partnership returns.  
  
 Any extension allowed by the Internal Revenue Service (IRS) for filing the federal return automatically extends the 
 Wisconsin due date, if you include a copy of the federal extension with your Wisconsin return. If you are not requesting 
 a federal extension, but you need additional time to file your Wisconsin return, you may obtain an extension available 
 to partnerships under federal law. To receive the Wisconsin extension, include with your Wisconsin return a com-
 pleted copy of the appropriate federal extension form or a statement explaining which federal extension provision you 
 are using. 
  
 Disaster Relief Extension. If you are filing under extension because of a federal or state disaster, include a state-
 ment indicating which disaster extension you are using and attach it to your return. 
  
  Caution: An extension for filing the return doesn’t extend the time to pay the franchise or income tax. Interest will 
  be charged on the tax not paid by the 15th day of the 3rd month following the close of the taxable year. You can 
  avoid interest charges during the extension period by paying the tax due by that date. See the department's       Make 
  a Payment webpage for information about making payments. 
                                                                                                                          
 Filing Methods. Partnerships are required to file Form 3 returns electronically and may file electronically through the 
 Federal/State E-Filing Program. If the requirement to file electronically causes an undue hardship, a taxpayer may 
 request an electronic filing waiver by filing Form EFT-102, Electronic Filing or Electronic Payment Waiver Request.  

 Note: If the partnership has 10 or fewer partners and the partnership's income on Form 3, Part II, Schedule 3K, Line 
 23, column (d) is $20,000 or less, the partnership does not need to file Form EFT-102 to request an electronic filing 
 waiver and may file a paper return using the instructions below. 

 If the waiver is approved, file your return on paper using these mailing instructions: 

 •  Do not fasten, staple or bind the pages of your return. Use paper clips instead. 
 •  Mail return to: Wisconsin Department of Revenue, PO Box 8965, Madison WI 53708-8965. 

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                                   2024 Wisconsin Form 3 Instructions                                                                Page 5 

Period Covered by Return 

The return must cover the same period as the partnership’s federal income tax return. File a 2024 Wisconsin return 
for calendar year 2024 or a fiscal year that begins in 2024. Generally, a fiscal year may end only on the last day of a 
month. Finally, the period covered by the return can’t exceed 12 months. 

Fiscal example:  Partnership AB has a fiscal year beginning March 1, 2024 and ending February 28, 2025. Partner-
ship AB files a 2024 Form 3 for the period of March 1, 2024 through February 28, 2025.   

If a partnership elects, under sec. 444, IRC, to have a taxable year other than a required taxable year, that election 
also applies for Wisconsin. Unlike for federal purposes, the partnership doesn’t have to make a required payment of 
tax as provided in sec. 7519, IRC. 

Partnerships reporting on a 52-53 week period for federal tax purposes must file on the same reporting period for 
Wisconsin. A 52-53 week taxable year is deemed to begin on the first day of the calendar month beginning nearest 
the first day of the 52-53 week taxable year. The taxable year is deemed to end on the last day of the calendar month 
closest to the last day of the 52-53 week taxable year for purposes of due dates, extensions, and assessments of 
interest and penalties. 
 
Any change in accounting period made for federal purposes must also be made for Wisconsin purposes. For the first 
taxable year for which the change applies, include with the Wisconsin return a copy of the IRS’s notice of approval 
of accounting period change if such approval is required or an explanation of the change if the IRS’s approval isn’t 
required. 
 
Accounting Methods and Elections 

Figure ordinary income by the accounting method regularly used in maintaining the partnership’s books and records. 
The method may include the cash receipts and disbursements method, an accrual method, or any other method 
permitted by the IRC in effect for Wisconsin. The method must clearly reflect income. 

Change in Accounting Method. A change in accounting method made for federal purposes must also be made for 
Wisconsin purposes, unless the change isn’t authorized under the IRC in effect for Wisconsin. Adjustments required 
federally as a result of a change made while the partnership is subject to Wisconsin taxation must also be made for 
Wisconsin purposes, except that in the last year a partnership is subject to taxation by Wisconsin it must take into 
account all remaining adjustments required. 
 
For the first taxable year for which the change applies, include with the Wisconsin return either a copy of the appli-
cation  for  change  in  accounting  method  filed  with  the  IRS  and  a  copy  of  the  IRS’s  consent, if applicable, 
or an explanation of the change if the IRS’s approval isn’t required. 
 
Elections. As explained above, a partnership can’t make different elections for federal and Wisconsin purposes with 
respect to accounting periods and accounting methods, unless the federal method isn’t permitted under the IRC in 
effect for Wisconsin. In situations where a partnership has an option under the IRC and the IRS doesn’t consider that 
option to be a method of accounting, a different election may be made for Wisconsin than that made for federal 
purposes. If federal law specifies the manner or time period in which an election must be made, those requirements 
also apply for Wisconsin purposes. For more information, see article titled Making a Different Federal Election for 
Wisconsin, on page 8 of Wisconsin Tax Bulletin 214 (July 2021). 
 
Payment of Estimated Tax 

If the total of a partnership's franchise or income tax due is $500 or more, it generally must make quarterly estimated 
tax payments using Wisconsin Form 3- ES or by electronic funds transfer (EFT). If you make an EFT payment using 
My Tax Account, use "estimated payment" as the payment type and use tax type code 01200. 
 
If the partnership return is filed on a calendar-year basis, 2025 estimated tax payments are due on or before April 15, 
2025, June 16, 2025, September 16, 2025, and January 15, 2026. If your return is filed on a fiscal-year basis, your 
due dates are the 15th day of the 4th, 6th, and 9th months of your current fiscal year, and the 1st month of the 
following fiscal year. If any due date falls on a Saturday, Sunday, or legal holiday, use the next business day. 

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                                  2024 Wisconsin Form 3 Instructions                                                                Page 6 

Failure to make required estimated tax payments may result in an interest charge. See the department's          Make a 
Payment webpage for information about making payments. 
 
Note: Make sure to identify the correct tax year when submitting a payment so that the payment is applied to the 
correct tax year's liability (e.g., use 2025 Form 3-ES to make an estimated tax payment for the 2025 tax year liability). 
If paying through My Tax Account, use "estimated payment" as the payment type. 
 
Disclosure of Related Entity Expenses and Reportable Transactions 

A partnership may be required to separately disclose certain expenses paid, accrued, or incurred to a related entity. 
A partnership or a partnership’s material advisor may also be required to separately disclose reportable transactions. 

 Caution: Wisconsin law provides that certain related entity expenses shall not be allowed as deductions if they are 
 not timely disclosed as required by the department. Also, penalties may apply for failure to disclose reportable 
 transactions to the department.  
                                                                                                                                            
Disclosure of Related Entity Expenses. If the partnership will be deducting more than $100,000 (after considering 
the effect of apportionment) of interest, rent, management fees, or intangible expenses paid, accrued, or incurred to 
a related person or entity, the partnership must generally include Schedule RT, Wisconsin Related Entity Expenses 
Disclosure Statement, with its franchise or income tax return. The Schedule RT instructions explain the reporting 
requirements. 

However, even if you are not required to include Schedule RT, if you are taking deductions for interest, rent, man-
agement fees, or intangible expenses, paid, accrued, or incurred to related entities, you must add those expenses 
back to federal income as Wisconsin modifications. If the expenses meet the tests for deductibility, you may subtract 
them out as subtraction modifications on Schedule 3K. 

Partnership’s Disclosure of Reportable Transactions. If a partnership was required to include any form with its 
federal tax return to disclose a “reportable transaction,” as defined under sec. 71.81(1)(c), Wis. Stats.  it,must file a 
copy of that form with the department within 60 days of the date it is required to file it for federal income tax purposes, 
provided that it is otherwise required to file a Wisconsin return. This includes federal Form 8886, Reportable Trans-
action Disclosure Statement.  

To file Form 8886 for Wisconsin purposes, check the "yes" box for question 20 on page 2 of Form 3 and include the 
form(s) with your return or send a paper copy of the form(s), separate from your Form 3, to the following address: 
Wisconsin Department of Revenue, Tax Shelters Program, PO Box 8906, Madison, WI 53708-8906. 

See the instructions to federal Form 8886 to determine if you are required to file the form for federal purposes. 

Material Advisor’s Disclosure of Reportable Transactions. A “material advisor” means any person who provides 
any material aid, assistance, or advice with respect to organizing, managing, promoting, selling, implementing, insur-
ing, or carrying out any reportable transaction (as defined in the U.S. Treasury Regulations) and who, directly or 
indirectly, derives gross income from providing such aid, assistance, or advice in an amount that exceeds the thresh-
old amount. 

For a material advisor providing advice to an entity and not an individual, the “threshold amount” is any of the follow-
ing: 
•  $25,000 if the reportable transaction is a listed transaction (as defined in the U.S. Treasury Regulations). 
•  $250,000 if the reportable transaction is not a listed transaction. 

For a material advisor providing advice to an individual, the “threshold amount” is any of the following: 

•  $10,000 if the reportable transaction is a listed transaction (as defined in the U.S. Treasury Regulations). 
•  $50,000 if the reportable transaction is not a listed transaction. 

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                                        2024 Wisconsin Form 3 Instructions                                                                Page 7 

A material advisor that is required to disclose a reportable transaction to the IRS must file a copy of the disclosure 
with the department within 60 days of the date it is required for federal income tax purposes, if the reportable trans-
action affects the taxpayer’s Wisconsin income or franchise tax liability. For federal purposes, the form required for 
this disclosure is Form 8918. 

If you are required to file Form 8918 for federal income tax purposes and the reportable transaction to which the form 
relates affects the taxpayer’s Wisconsin income or franchise tax liability, send a paper copy, separate from Form 3, 
to the following address: Wisconsin Department of Revenue, Tax Shelters Program, PO Box 8906, Madison, WI 
53708-8906. Include a listing of the names and identification numbers of each Wisconsin taxpayer to whom the 
advisor provided services. 

Internal Revenue Service Adjustments, Amended Returns, Claims for Refund, and Final Returns    

Internal Revenue Service Adjustments. If a partnership’s federal tax return is adjusted by the IRS and such adjust-
ments affect the Wisconsin net tax payable, the amount of a Wisconsin credit, a Wisconsin net operating loss car-
ryforward, or a Wisconsin capital loss carryforward of a partner, you must report such adjustments to the department 
within 180 days after they become final (as provided in sec. Tax 2.105(4), Wis. Adm. Code) by filing an amended 
Wisconsin partnership tax return and including a copy of the final federal audit report. 

In addition, each partner must file an amended Wisconsin income/franchise tax return reporting their share of each 
adjustment made by the IRS to the partnership return. Each partner must include an amended Schedule 3K-1 with 
the amended return filed. 

Note: If the partnership's federal audit adjustment(s) was assessed at the entity level, the partnership may request 
within 60 days after the final determination by the IRS to amend the partnership returns and pay tax on behalf of the 
partners as provided under sec. 71.76(2)(b), Wis. Stats.  

• If the department approves the request, the partnership must amend the Wisconsin partnership returns for each 
  reviewed year, as defined under sec. 6225, IRC, to report such changes within 180 days from the date the de-
  partment approves the request. 

• If the department denies the request, the partnership and its pass-through members must file amended Wiscon-
  sin returns for each reviewed year, as defined under sec. 6225, IRC, to report such changes within 180 days 
  from the date the department denies the request. 

For additional details on making a request for a partnership to pay tax on behalf of its partners after an IRS audit, see 
the department's common questions at https://www.revenue.wi.gov/Pages/FAQS/ise-pship.aspx.  

Amended Returns. If the partnership and the partners file amended federal returns and the changes affect the 
Wisconsin net tax payable, the amount of a Wisconsin credit, a Wisconsin net operating loss carryforward, or a 
Wisconsin capital loss carryforward of a partner, both the partnership and the partners must file amended Wisconsin 
returns with the department within 180 days after filing the amended federal returns. 

To file an amended Wisconsin return, use Form 3 and check item C on the front of the return. Include Schedule AR, 
Explanation of Amended Return, with the return to include an explanation of any changes made. If the change in-
volves an item of income, deduction, or credit that you were required to support with a form or schedule on your 
original return, include the corrected form or schedule with your amended return. In addition, include amended Sched-
ules 3K-1 and provide copies to the partners to include with their amended Wisconsin returns. Do not include a 
copy of the original return. 
File your amended return electronically by using one of the third-party software providers .
If you have an approved electronic filing waiver, send your amended Form 3 to the Wisconsin Department of Reve-
nue, PO Box 8965, Madison, WI 53708-8965. Don’t attach amended returns to other tax returns that you are filing. 

Claims for Refund. A claim for refund must be filed within four years of the unextended due date of the return. 
However, a claim for refund to recover all or part of any tax or credit paid as a result of an office or field audit must 
be filed within four years after such an assessment. That assessment must have been paid and must not have been 
protested by filing a petition for redetermination. See sec. Tax 2.12, Wis. Adm. Code, for more information. 

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                                    2024 Wisconsin Form 3 Instructions                                                                Page 8 

Final Returns. If the partnership liquidated during the taxable year, put a check mark in the space next to item G on 
the front of the return. Enter the date of liquidation as the taxable year ending date at the top of the return.  

Generally, the final return is due on or before the federal due date. In most cases, this is the 15th day of the 3rd 
month after the date the partnership dissolved. The tax due with the return is payable by the unextended due date of 
the final return. 

Partnerships Having Nonresident Partners 

A partnership that has one or more nonresident partners is generally required to pay pass-through entity withholding. 
Additionally, the partnership may file a composite individual income tax return on behalf of qualifying nonresident 
individual partners. 

Pass-Through Entity Withholding. A partnership is generally required to pay withholding tax on its distributable 
income which is allocable to a nonresident partner. 

A nonresident partner includes: 

•  An individual who is not domiciled in Wisconsin; 
•  A partnership, limited liability company, or corporation whose commercial domicile is outside Wisconsin; and 
•  An estate or trust that is a nonresident under sec. 71.14(1) to (3m), Wis. Stats. 

However, withholding is not required on behalf of the following nonresident partners: 

•  A partner who is not otherwise subject to Wisconsin income or franchise tax (such as a 501(c)(3) organization with 
 no unrelated business taxable income). 
•  A partner whose share of income from the partnership is less than $2,000. 
•  A partner who completes Form PW-2, Wisconsin Nonresident Partner, Member, Shareholder, or Beneficiary Pass-
 Through Withholding Exemption Affidavit, or receives a continuous exemption letter from the department and pro-
 vides the exemption letter to the partnership. See the Form PW-2 instructions for details. 

Note: Pass-through withholding is not required if a partnership makes an election under sec. 71.21(6)(a), Wis. Stats., 
to pay tax at the entity level and does not pass-through any withholding to its partners on Schedule 3K-1. 

Pass-Through Withholding Estimated Payments.         A pass-through entity is required to pay quarterly estimated 
withholding tax on a nonresident member’s share of income attributable to Wisconsin. The pass-through entity must 
make quarterly payments of withholding tax on or before the 15th day of the 3rd, 6th, 9th, and 12th month of the 
taxable year. You make the estimated withholding tax payments electronically. See the department's  Make a Pay-
ment webpage for information about making payments. 

The partnership must also file Form PW-1,  Wisconsin Nonresident Income or Franchise Tax Withholding on Pass-
Through Entity Income, annually to report estimated withholding tax paid and to pay any additional withholding tax 
due on behalf of its nonresident partners. Form PW-1 is due with payment by the 15th day of the 3 rdmonth following 
the close of the partnership’s taxable year. See the Form PW-1 instructions for details of the filing procedures. 

Composite Return for Nonresident Individual Partners. A partnership that has two or more nonresident individual 
partners who derive no taxable income or deductible loss from Wisconsin other than their distributive shares from the 
partnership may file a composite individual income tax return on behalf of those partners. The partnership files this 
return on Form 1CNP, Composite Wisconsin Individual Income Tax Return for Nonresident Partners. 

Individuals that are fiscal year filers, part-year Wisconsin residents, or individuals who have other sources of Wiscon-
sin income/loss may not participate in the composite return. No tax credits are allowed on the composite return other 
than a credit for pass-through entity withholding tax paid on behalf of each participating partner. Additionally, partici-
pating partners cannot claim any amounts deductible as itemized deductions on the composite return. 

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                                     2024 Wisconsin Form 3 Instructions                                                                Page 9 

Partners that do not qualify to participate in the composite return must file a separate Wisconsin return to report the 
income from the partnership. 

For more information on eligibility for composite filing and composite filing procedures, see the Form 1CNP instruc-
tions. 

Schedules 3K-1 and Information Returns 

Schedules 3K-1. The partnership must include a Schedule 3K-1 for each of its partners along with its Form 3. The 
department is no longer accepting Schedules 3K-1 on magnetic media. File them electronically. You may obtain 
specifications on  the  department’s website  at revenue.wi.gov/Pages/OnlineServices/corp-partnership-third-party-
vendors.aspx.  

Information Returns for Miscellaneous Income. If the partnership paid $600 or more in rents, royalties, or certain 
nonwage compensation to one or more individuals, the partnership must file an information return to report those 
payments. For more information, see Wisconsin Form 9b, Miscellaneous Income. 
 
Wisconsin Use Tax 

The partnership may be liable for use tax. Use tax is the counterpart of sales tax. Tangible personal property, certain 
coins and stamps, certain leased properties affixed to real estate, certain digital goods, and selected services, taxable 
under Wisconsin’s sales tax law, which are stored, used, or consumed in Wisconsin, are subject to use tax if the 
proper sales tax is not paid. Examples of purchases that frequently result in a use tax liability include the following: 
•  Mail order and internet purchases. You owe Wisconsin use tax if you buy taxable products such as computers, 
 furniture, or office supplies from a seller who is not registered to collect Wisconsin tax. 
•  Inventory. If you purchase inventory items without tax for resale, and use the items instead of selling them, you 
 owe use tax. 
•  Give-aways. Generally, if you purchase items without tax and then give them away in Wisconsin, you owe use tax. 
If you hold a seller’s permit, use tax certificate, or consumer’s use tax certificate, report your use tax on your sales 
and use tax return, using My Tax Account. If you are not registered to report use tax and do not make purchases 
subject to use tax on a regular basis, report use tax on Form UT-5, Consumer Use Tax Return. For more information: 

•  Visit the department's website at https://www.revenue.wi.gov/Pages/SalesAndUse/home.aspx, 
•  Review Fact Sheet 2104, Wisconsin Use Tax 
•  Call (608) 266-2776, 
•  E-mail DORSalesandUse@wisconsin.gov, or 
•  Write to:      Wisconsin Department of Revenue 
                  Mail Stop 5-77 
                  PO Box 8949 
                  Madison, WI 53708-8949 

Penalties for Not Filing or Filing Incorrect Returns 

If you don’t timely file a franchise or income tax return that you are required to file, or if you file an incorrect return 
due to negligence or fraud, interest, penalties, and late fees may be assessed against you. The interest rate on de-
linquent taxes is 18% per year. Civil penalties may be as much as 100% of the amount of tax not reported on the 
return. Criminal penalties for filing a false return include a fine of up to $10,000 and imprisonment. Further, if you 
fail to disclose reportable transactions, you may be subject to the penalties described in sec. 71.81, Wis. Stats., 
including a $30,000 penalty for failure to disclose a listed transaction. 
 
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                              2024 Wisconsin Form 3 Instructions                                                                Page 10 

Conformity with Internal Revenue Code and Exceptions 

The Wisconsin income and franchise tax law applicable is based on the federal Internal Revenue Code (IRC). The 
IRC generally applies for Wisconsin purposes at the same time as for federal purposes. For taxable years begin-
ning on or after January 1, 2024, Wisconsin's definition of the IRC is the IRC as of December 31, 2022 with excep-
tions. Below is a listing of the exceptions. 
Note: The exceptions and provisions adopted by Wisconsin listed below are those in effect as of the publication date 
of these instructions. It is possible that subsequent changes in Wisconsin law may add or eliminate some exceptions 
applicable to taxable years beginning in 2024. 
 
Provisions of the Internal Revenue Code Adopted by Wisconsin: 

Changes made by the following public laws apply for Wisconsin purposes for taxable years beginning after Decem-
ber 31, 2010: 
 
• Section 1201 of P.L. 108-173, relating to health savings accounts. 
• Section 307 of P.L. 109-432, relating to the exclusion from gross income of a one-time distribution from individual 
  retirement accounts to fund health savings accounts. 
Changes made by the following public laws apply for Wisconsin purposes for taxable years beginning after Decem-
ber 31, 2022: 
 
• The following sections of P.L. 117-2: 
  o  Section 5001, relating to the addition of certain nonprofit entities and internet publishing organizations to the 
       list of eligible entities to receive a paycheck protection program loan. 
  o  Section 5002, relating to additional appropriations for targeted economic injury disaster loan advances. 
  o  Section 5005, relating to additional appropriations for shuttered venue operator grants and a reduction in the 
       amount of a paycheck protection program loans received. 
  o  Section 9623, relating to allowing a married individual who files as married filing separate and lives apart 
       from their spouse for the last 6 months of the year or has a divorce or separation instrument with the other 
       spouse by the end of the tax year to claim the earned income credit. 
  o  Section 9624, relating to permanently raising the investment income limit to $10,000, and allowing adjust-
       ments for inflation in subsequent years for purposes of claiming the earned income credit. 
  o  Section 9672, relating to targeted economic injury disaster loan advances received under sec. 331 of Division 
       N of P.L. 116-260 not being included in gross income, allowing deductions, not reducing tax attributes, and 
       allowing basis increases. For partnerships and S corporations, any amounts forgiven are treated as tax-
       exempt for purposes of sec. 705 and 1366, IRC.  
• Section 2 of P.L. 117-6, relating to the extension of paycheck protection program loan funding to June 30, 2021. 
• The following sections of Division H of P.L. 117-58: 
  o  Section 80401, relating to the addition of qualified broadband projects to the list of federal exempt facility 
       bonds. 
  o  Section 80402, relating to the addition of qualified carbon dioxide capture facilities to the list of federal exempt 
       facility bonds. 
  o  Section 80601, relating to including certain contributions received by a regulated public utility which provides 
       water or sewerage disposal services in the definition of a "contribution to the capital of the taxpayer" for 
       purposes of excluding the contribution from gross income of a corporation. 
       
IP-130 (R. 11-24) 

                                     2024 Wisconsin Form 3 Instructions                                                                Page 11 

Provisions of the Internal Revenue Code Not Adopted by Wisconsin: 

•  Sections 1, 3, 4, and 5 of P.L. 106-519, which repealed foreign sales corporation provisions and replaced with 
 extraterritorial income provisions. 
•  Sections 101, 102, and 422 of P.L. 108-357, which repealed the exclusion for extraterritorial income, domestic 
 production activities deduction, and the creation of sec. 965 – incentives to reinvest foreign earnings in the U.S. 
•  Sections 1310 and 1351 of P.L. 109-58, which provides for the modification to special rules for nuclear decom-
 missioning costs, repeal of the limitation on contract research expenses paid so small businesses, universities, 
 and federal laboratories. 
•  Section 11146 of P.L. 109-59, the tax treatment of state ownership of railroad real estate investment trust. 
•  Section 403(q) of P.L. 109-135, which provides incentives to reinvest foreign earnings from controlled foreign 
 corporations in the U.S. 
•  Section 513 of P.L.109-222, which repeals foreign sales corporation/extraterritorial income exclusion binding con-
 tract relief. 
•  Section 104 of P.L. 109-432, which increases the rates of the alternative incremental credit and provides a new 
 alternative simplified credit. 
•  Sections 8233 and 8235 of P.L. 110-28, which created a special rule for banks required to change from the reserve 
 method of accounting in becoming tax-option (S) corporations and the elimination of all earnings and profits at-
 tributable to pre-1983 years. 
•  Section 11(e) and (g) of P.L. 110-172, which provides clerical amendments to research credits for controlled cor-
 porations and common control, and clerical amendments to the FSC Repeal and Extraterritorial Income Exclusion 
 Act of 2000. 
•  Section 301 of P.L. 110-245, which provides for tax responsibilities of expatriation. 
•  Section 15351 of P.L. 110-246, limits the amount of farm losses that may offset non-farming business income to 
 $300,000. 
•  Section 302 of division A, section 401 of division B, and sections 312, 322, 502(c), 707, and 801 of division C of 
 P.L. 110-343, which limits executive compensation for employers participating in troubled assets relief program 
 for the taxable year in which the troubled assets exceed $300,000,000. Caps the domestic production activities 
 deduction at 6% for oil-related activities. The deduction for income attributable to domestic production activities in 
 Puerto Rico applies to the first 8 taxable years beginning before January 1, 2010. Tax incentives for investment 
 in the District of Columbia includes exclusion for gain on sale of an asset held from more than 5 years. Defines 
 wages for purposes of the domestic production activities deduction. Creates sec. 198A to provide for expensing 
 of disaster expenses for control of hazardous substances. Specifies treatment of nonqualified deferred compen-
 sation plans maintained by foreign corporations. 
•  Sections 1232, 1251, 1501, and 1502 of division B of P.L. 111-5, which suspends the special rules for original 
 issue discount on high yield obligations issued during the period 9/1/2008 and 12/31/2009. Provides that no built-
 in-gain tax is imposed on a tax-option (S) Corporation for a taxable year beginning in 2009 and 2010 if the seventh 
 taxable year in the corporation's recognition period preceded such taxable year. Tax-exempt obligations held by 
 financial institutions, in an amount not to exceed 2 percent of the adjusted basis of the financial institution's assets, 
 are not taken into account for determining the portion of the financial institutions interest expense subject to the 
 pro rata interest disallowance rule of sec. 265(b). Modification of the small insurer exception to tax-exempt interest 
 expense allocation rules for financial institutions. 
•  Sections 211, 212, 213, 214, and 216 of P.L. 111-226, which adopts a matching rule to prevent the separation of 
 foreign taxes from the associated foreign income, denies a foreign tax credit for the disqualified portion of any 
 foreign income tax paid in connection with a covered asset acquisition, provides a separate application of foreign 
 tax credit limitation to items resourced under treaties, limits the amount of foreign taxes deemed paid with respect 
 to sec. 956 inclusions, treats a foreign corporation as a member of an affiliated group for interest allocation and 
 apportionment purposes in more than 50% of gross income is effectively connected income and at least 80% of 
 either the vote or value of all outstanding stock is owned directly or indirectly by members of the affiliated group. 
•  Section 2122 of P.L. 111-240, clarifies the income sourcing rules for guarantee fees. 

IP-130 (R. 11-24) 

                      2024 Wisconsin Form 3 Instructions                                                                Page 12 

•  Sections 754 and 760 of P.L. 111-312, which specifies certain tax incentives for investments in the District of 
 Columbia and specifies that gross income does not include gain on certain small business stock.. 
•  Sections 104, 318, 322, 323, 326, 327, and 411 of P.L. 112-240, which makes the alternative minimum tax ex-
 emption permanent and indexed for inflation, extends through 2013 the deduction with respect to income attribut-
 able to domestic production activities in Puerto Rico, extends the subpart F exception for active financing income, 
 extends the look-thru treatment of payments between related controlled foreign corporations under foreign per-
 sonal holding company, extends through 2013 the reduction in tax-option (S) corporation built-in gains tax and 
 clarifies treatment of installment sales, provides a 60% exclusion for gain on small business stock acquired before 
 2019, and extends through 2013 the rules that allow gain certain sales of electric transmission property to be 
 recognized ratably over 8 taxable years. 
•  Public Law 114-7, relating to contributions for relief of slain New York Police Detectives. 
•  Section 1101 of P.L. 114-74 relating to partnership rules. 
•  Section 305 of division P of P.L. 114-113, relating to the transportation costs of independent refiners. 
•  Sections 123, 125-128, 143, 144, 151-153, 165-167, 169-171, 189, 191, 326, and 411 of division Q of P.L. 114-
 113. 
 o  Section 123, relating to extension of 15-year straight-line cost recovery for qualified leasehold improvements, 
  qualified restaurant buildings and improvements, and qualified retail improvements. 
 o  Section 125, relating to the extension of treatment of certain dividends of regulated investment companies. 
 o  Section 126, relating to the extension of exclusion of 100 percent of gain on certain small business stock. 
 o  Section 127, relating to the extension of reduction in S-corporation recognition period for built-in gains tax. 
 o  Section 128, relating to the extension of subpart F exception for active financing income. 
 o  Section 143, relating to the extension and modification of bonus depreciation. 
 o  Section 144, relating to the extension of look-thru treatment of payments between related controlled foreign 
  corporations under foreign personal holding company rules. 
 o  Section 151, relating to the extension and modification of exclusion from gross income of discharge of qualified 
  principal residence indebtedness. 
 o  Section 152, relating to the extension of mortgage insurance premiums treated as qualified residence interest. 
 o  Section 153, relating to the extension of above-the-line deduction for qualified tuition and related expenses. 
 o  Section 165, relating to the extension of classification of certain race horses as 3-year property. 
 o  Section 166, relating to the extension of 7-year recovery period for motorsports entertainment complexes. 
 o  Section 167, relating to the extension and modification of accelerated depreciation for business property on an 
  Indian reservation. 
 o  Section 169, relating to the extension of special expensing rules for certain film and television productions; 
  special expensing for live theatrical productions. 
 o  Section 170, relating to the extension of deduction allowable with respect to income attributable to domestic 
  production activities in Puerto Rico. 
 o  Section 171, relating to the extension and modification of empowerment zone tax incentives. 
 o  Section 189, relating to the extension of special allowance for second generation biofuel plant property. 
 o  Section 191, relating to the extension of special rule for sales or dispositions to implement FERC or State 
  electric restructuring policy for qualified electric utilities. 
 o  Section 326, relating to the dividends derived from RICs and REITs ineligible for deduction for United States 
  source portion of dividends from certain foreign corporations. 
 o  Section 411, relating to the partnership audit rules. 

IP-130 (R. 11-24) 

                                  2024 Wisconsin Form 3 Instructions                                                                Page 13 

•  Sections 11011, 11012, 13201 (a) to (e) and (g), 13206, 13221, 13301, 13304 (a), (b), and (d), 13531, 13601, 
 13801, 14101, 14102, 14103, 14201, 14202, 14211, 14212, 14213, 14214, 14215, 14221, 14222, 14301, 14302, 
 14304, and 14401 of P.L. 115−97: 
 o  Section 11011, relating to the 20% deduction for domestic qualified business income. 
 o  Section 11012, relating to the limitation on losses for taxpayers other than corporations. 
 o  Section 13201 (a) to (e) and (g), relating to the temporary 100% expensing for certain business assets (bonus 
  depreciation). 
 o  Section 13206, relating to the amortization of research and experimental expenditures beginning in 2022. 
 o  Section 13221, relating to special rules for the taxable year of inclusion. 
 o  Section 13301, relating to the 30% taxable income limitation for the deduction of interest. 
 o  Section 13304(a), (b), and (d) relating to the limit on the deduction by employers of fringe benefits (meals, 
  entertainment, and transportation). 
 o  Section 13531, relating to the limitation on deductions for FDIC premiums. 
 o  Section 13601, relating to the modification of the limitation on excessive employee remuneration. 
 o  Section 13801, relating to the production period for beer, wine, and distilled spirits. 
 o  Section 14101, relating to the deduction for the foreign-source portion of dividends received by domestic cor-
  porations from specified 10% owned foreign corporations. 
 o  Section 14102, relating to the special rules for sale or transfers involving specified 10% owned foreign corpo-
  rations. 
 o  Section 14103, relating to the treatment of deferred foreign income upon transition to a participation exemption 
  system of taxation. 
 o  Section 14201, relating to the current year global intangible low-taxed income by U.S. shareholders. 
 o  Section 14202, relating to the deduction for foreign derived intangible income and global intangible low-taxed 
  income. 
 o  Section 14211, relating to the elimination of the inclusion of foreign base company oil related income. 
 o  Section 14212, relating to the repeal of the inclusion based on withdrawal of previously excluded subpart F 
  income from qualified investment. 
 o  Section 14213, relating to the modification of stock attribution rules for determining the status as a controlled 
  foreign corporation. 
 o  Section 14214, relating to the modification of the definition of a U.S. shareholder. 
 o  Section 14215, relating to the elimination of the requirement that a corporation must be controlled for 30 days 
  before the subpart F inclusions apply. 
 o  Section 14221, relating to the limitations on income shifting through intangible property transfers. 
 o  Section 14222, relating to certain related party amounts paid or accrued in hybrid transactions or with hybrid 
  entities. 
 o  Section 14301, relating to the repeal of section 902 – indirect foreign tax credits, and determination of the 
  deemed paid credit for subpart F inclusions under sec. 960 on a current year basis. 
 o  Section 14302, relating to the separate foreign tax credit limitation basket for foreign branch income. 
 o  Section 14304, relating to the election to increase the percentage of domestic taxable income offset by the 
  overall domestic loss treated as foreign source. 
 o  Section 14401, relating to the base erosion anti-abuse tax. 
•  Sections 40304, 40305, 40306, and 40412 of P.L. 115-123. 
 o  Section 40304, relating to the extension of classification of certain race horses as 3-year property. 

IP-130 (R. 11-24) 

                                    2024 Wisconsin Form 3 Instructions                                                                Page 14 

 o  Section 40305, relating to the extension of 7-year recovery period for motor-sports entertainment complexes. 
 o  Section 40306, relating to the extension of accelerated depreciation for business property on an Indian reser-
  vation. 
 o  Section 40412, relating to the extension of special allowance for second generation biofuel plant property. 
•  Section 101 (c) of division T of P.L. 115-141, relating to the application of section 199 to certain qualified payments 
 paid after 2017 for payments received by a patron from a specified agricultural or horticultural cooperative for 
 qualified production activities income. 
•  Sections 101 (d) and (e), 102, 201 to 207, 301, 302, and 401 (a) (47) and (195), (b) (13), (17), (22) and (30), and 
 (d) (1) (D) (v), (vi), and (xiii) and (xvii) (II) of division U of P.L. 115-141. 
 o  Sections 101 (d) and (e) and 102, relating to technical corrections to bonus depreciation, alternative minimum 
  tax requirements for qualified Indian reservation property, and qualified production activities income made by 
  the Protecting Americans from Tax Hikes Act of 2015 and the Consolidated Appropriations Act, 2016. 
 o  Sections 201 to 207 relating to partnership audit rules. 
 o  Sections 301 and 302, relating to amendments to regulatory requirements for partnership returns and the def-
  inition of qualified small power production facilities made by the Bipartisan Budget Act of 2015 and the Energy 
  Policy Act of 2005. 
 o  Section 401 (a) (47) and (195), (b) (13), (17), (22) and (30), and (d) (1) (D) (v), (vi), and (xiii) and (xvii) (II), 
  relating to clerical corrections and deadwood-related provisions to the following: exempt facility bonds, tax-
  exempt enterprise zone facility bonds, the special allowance for qualified disaster assistance property, reducing 
  the dividends received deduction where portfolio stock is debt financed, exemption from tax on corporations, 
  certain trusts, etc., requirements of domestic international sales corporations, dividends received by corpora-
  tions, rules applied to deductions for dividends received, the foreign tax credit, and dividends received by cor-
  porations.  
•  Sections 104, 114, 115, 116, 130, and 145 of division Q of P.L. 116-94. 
 o  Section 104, relating to the deduction of qualified tuition and related expenses. 
 o  Section 114, relating to the classification of certain race horses as 3-year property. 
 o  Section 115, relating to the 7-year recovery period for motorsports entertainment complexes. 
 o  Section 116, relating to the accelerated depreciation for business property on Indian reservations. 
 o  Section 130, relating to special allowance for second generation biofuel plant property. 
 o  Section 145, relating to look-thru rule for related controlled foreign corporations. 
•  Sections 2304 and 2306 of P.L. 116-136. 
 o  Section 2304, relating to the modification of limitations on losses for taxpayers other than corporations. 
 o  Section 2306, relating to the modifications of limitation on business interest. 
•  Sections 111, 114, 115, 116, 118 (a) and (d), 133, 137, 138, and 210 of division EE of P.L. 116-260. 
 o  Section 111, relating to the look-thru rule for related controlled foreign corporations. 
 o  Section 114, relating to the exclusion from gross income of discharge of qualified principal residence indebted-
  ness. 
 o  Section 115, relating to the 7-year recovery period for motorsports entertainment complexes. 
 o  Section 116, relating to the expensing rules for certain productions. 
 o  Section 118 (a) and (d), relating to empowerment zone tax incentives. 
 o  Section 133, relating to the treatment of mortgage insurance premiums as qualified residence interest. 
 o  Section 137, relating to the classification of certain race horses as 3-year property. 
 o  Section 138, relating to the accelerated depreciation for business property on Indian reservations. 

IP-130 (R. 11-24) 

                          2024 Wisconsin Form 3 Instructions                                                                Page 15 

 o  Section 210, relating to temporary allowance of full deduction for business meals. 
•  Sections 5003, 9041, 9673, 9675, and 9708 of P.L. 117-2. 
 o  Section 5003, relating to additional restaurant revitalization grant funds. 
 o  Section 9041, relating to the excess business loss limitation extension for noncorporate taxpayers to December 
  31, 2026. 
 o  Section 9673, relating to restaurant revitalization grants not being included in gross income and deductions 
  allowed. 
 o  Section 9675, relating to the exclusion from income for most student loans discharged after December 31, 
  2020 and before January 1, 2026 
 o  Section 9708, relating to the expanded definition of "covered employee" for publicly held corporations deducting 
  excessive employee remuneration. 
•  Section 13903 (b) of P.L. 117-169, relating to the extension of the excess business loss limitation for noncorporate 
 taxpayers through December 31, 2028. 
 
Depreciation and Bonus Depreciation 

For taxable years beginning on or after January 1, 2014, for purposes of computing depreciation, depletion, and 
amortization, the Internal Revenue Code means the federal Internal Revenue Code in effect on January 1, 2014. 
 
For 2014 and beyond, bonus depreciation was reinstituted by the federal government, and an adjustment is required 
to account for the depreciation difference because Wisconsin has not adopted federal bonus depreciation provisions. 
For Wisconsin purposes, depreciation, depletion, and amortization is computed based on the Internal Revenue Code 
in effect on January 1, 2014, and bonus depreciation was not in effect on that date. 
 
The provision that property required to be depreciated for taxable year 1986 under the Internal Revenue Code as 
amended to December 31, 1980, to continue to be depreciated under the Internal Revenue Code as amended to 
December 31, 1980, is limited to taxable years beginning before January 1, 2014. 
 
Wisconsin has not adopted federal bonus depreciation provisions  

For Wisconsin purposes, depreciation, depletion, and amortization is computed based on the Internal Revenue 
Code in effect on January 1, 2014.  Bonus depreciation was not in effect on January 1, 2014. 

Section 179 Expense 

For taxable years beginning on or after January 1, 2014, sections 179, 179A, 179B, 179C, 179D, and 179E of the 
Internal Revenue Code, related to expensing of depreciable business assets, apply for Wisconsin tax purposes. 
"Internal Revenue Code" means the federal Internal Revenue Code in effect for the year in which the property is 
placed in service. 

How to Report Differences 

You must report any differences between federal income and income for Wisconsin purposes in Schedule 3K, col-
umn c. For differences relating to depreciation and amortization, you must prepare schedules detailing the differences 
between the federal and Wisconsin computations and include them with your return. 

IP-130 (R. 11-24) 

                                   2024 Wisconsin Form 3 Instructions                                                                Page 16 

Specific Instructions for Form 3 

Items A Through M 

Before completing items A through M, fill in the partnership’s 2024 taxable year at the top of the form and the part-
nership’s name and address. The name and address information should be written on single lines. Do not stack the 
information on the lines. If more room is needed, abbreviate where possible.  

Do not write "None" on the amount lines if there is not an entry for the lines. Instead, leave the lines blank.  

■ Federal Employer Identification Number – Enter the partnership’s federal employer identification number (FEIN). 

■ Business Activity (NAICS) Code – Enter the partnership’s principal business activity code, based on the North 
  American Industry Classification System (NAICS), from your federal return. 

■ Number of Partners – Enter the total number of partners that the partnership had during the taxable year. 

■ Number of Nonresident Partners – Enter the total number of nonresident partners that the partnership had during 
  the taxable year, including individuals, estates, and trusts not domiciled in Wisconsin and other partnerships, limited 
  liability companies, and corporations whose commercial domicile is not in Wisconsin. 

■ State of Formation and Year – Enter the 2-letter postal abbreviation for the state (or name of the foreign country) 
  under whose laws the partnership was organized and the year of formation. 

■ A. Entity Type – Check the space indicating which type of entity is filing this return. If your entity is not one of the 
  types listed, check the space next to “Other” and indicate the type of entity.  

■ B. Extended Due Date –  If the partnership has an extension of time to file its Wisconsin return, check here and 
  enter the extended due date.  

  Disaster Relief Extension. If you are filing under extension because of a federal or state disaster, include a state-
  ment indicating which disaster extension you are using and attach it to your return. 

■ C. Amended Return –  If this is an amended return, check here. Include Schedule AR, Explanation of Amended 
  return, to explain the changes made, and include any supporting forms or schedules. 

■ D. Filing Form 1CNP – Check here if the partnership is filing a composite Wisconsin individual income tax return, 
  (Form 1CNP) on behalf of its qualified and participating nonresident partners. If you check Item D, then you may 
  be required to file Form PW-1.  See the instructions for Form 1CNP and Form PW-1 for more information. 

■ E. Schedule RT Required –     Check here if the partnership is filing Schedule RT,   Wisconsin Related Entity Ex-
  penses Disclosure Statement, with its return. Schedule RT is generally required if the partnership pays, accrues, 
  or incurs more than $100,000 of expenses to a related person or entity in the taxable year. See the Schedule RT 
  instructions for details of the requirement to file Schedule RT.  

■ F. Partnership Formation – Check here if the partnership is filing its first partnership return. 

■ G. Partnership Termination – Check here if the partnership terminated during the taxable year and is filing its final 
  return. Note: checking this box will not close all your accounts with the department; only the partnership account 
  will close. 
■ H. Disregarded Entities – Check here if the partnership is the sole owner of any disregarded entities. A single-
  member LLC that is disregarded for federal income tax purposes is also disregarded for Wisconsin franchise or 
  income tax purposes. You must include the income of any disregarded entities owned by the partnership in the 
  partnership's amounts on Schedule 3K. Include with your return Schedule DE, which lists the partnership's solely-
  owned LLCs. 

IP-130 (R. 11-24) 

                                       2024 Wisconsin Form 3 Instructions                                                                Page 17 

■ I. Election to Pay Tax at the Entity Level – Check here to indicate the election was made to pay tax at the entity 
  level and complete Schedule 3-ET, Entity-Level Tax Computation. For additional information detailing the entity-
  level  tax,  see  Schedule  3-ET  instructions  and  common  questions  on  the  department's  website  at   reve-
  nue.wi.gov/Pages/FAQS/ise-passthroughpartnr.aspx. 

■ J. Election to Pay Tax at the Entity Level Was Made by Lower-Tier Entity – Check here if you are a member 
  of a multi-tier pass-through entity structure and any of your lower-tier entities made  an election  under sec. 
  71.21(6)(a), Wis. Stats., to pay tax at the entity level. 

  A lower-tier entity is a pass-through entity that is directly or indirectly owned by the partnership. 
  If one or more of your lower-tiered entities made an election to pay tax at the entity level and you are not making 
  the election to pay tax at the entity level, you must provide each partner a supplemental statement with the Sched-
  ule 3K-1 detailing the amount of the partner's items of income, gain, loss, and deduction that have been taxed by 
  a lower-tier entity. Also include the partner's proportionate share of tax paid by the lower-tier entity as a result of 
  the election. 

  Caution: In general, if a partnership receives a Schedule 3K-1 from a lower-tiered entity making the election to 
  pay tax at the entity level, the partnership does not include adjustments, as it relates to the lower-tier's entity-level 
  tax election, to column b or c of Schedule 3K and the Schedules 3K-1 for the items of income, gain, loss, and 
  deduction received from the lower-tier entity making the election. The partnership must include the Schedule 3K-
  1 from the electing lower-tier partnership when filing Form 3 and completing Schedule 3K-1, Part IV,     Partner's 
  Share of Apportionment Factors. 

■ K. Internal Revenue Service Adjustments – Check here and complete lines 1 and 2 if, for any taxable year, the 
  partnership had an IRS adjustment that became final (as provided in sec. Tax 2.105(4), Wis. Adm. Code) during 
  the partnership’s 2024 taxable year. 
  •  On line 1, enter the taxable year(s) to which the item(s) being adjusted by the IRS relates. 
  •  On line 2, enter the taxable year(s) to which the item(s) being adjusted by the IRS is applied. The year(s) entered 
    on line 2 may differ from line 1 due to the IRS centralized partnership audit rules under the Bipartisan Budget 
    Act of 2015. 

  For information on reporting IRS adjustments to the department, see the instructions under Internal Revenue Ser-
  vice Adjustments, Amended Returns, and Claims for Refund located earlier in these instructions. 

■ L. Election to Claim Certain Credits at the Entity Level  – Check here if the partnership qualifies and elects to 
  claim any of the following credits at the entity level: 

 Caution: A partnership that makes an election under sec. 71.21(6)(a), Wis. Stats., to pay tax at the entity level 
 may not make the election to claim these credits at the entity level. 
                                                                                                                    
  • The Enterprise Zone Jobs Credit (Schedule EC) 
    Under sec. 71.07(3w)(c)2.b., Wis. Stats., a partnership may elect to claim the enterprise zone jobs credit, if the 
    credit results from a contract entered into with the Wisconsin Economic Development Corporation before De-
    cember 22, 2017. A partnership that wishes to make this election shall make the election on its original return 
    and cannot subsequently make or revoke the election. If a partnership elects to claim the credit, the partners 
    cannot claim the credit. 
  • The Business Development Credit (Schedule BD) 
    Under sec. 71.07(3y)(c)1.b., Wis. Stats., a partnership may elect to claim the business development credit, if the 
    credit results from a contract entered into with the Wisconsin Economic Development Corporation before De-
    cember 22, 2017. A partnership that wishes to make this election shall make the election on its original return 
    and cannot subsequently make or revoke the election. If a partnership elects to claim the credit, the partners 
    cannot claim the credit. 

IP-130 (R. 11-24) 

                                   2024 Wisconsin Form 3 Instructions                                                                Page 18 

  If the partnership makes this election, include Schedules EC and/or BD with Form 3 and include the amount of the 
  credit(s) on Form 3, page 1, line 8. Do not pass through the credits to the partners on Schedules 3K-1. 

■ M. Reorganization – If the partnership reorganized during the tax year, check here. 
  •  If the reorganization resulted in the continuation of a prior partnership, enter the section of the Internal Revenue 
   Code that applies. For example: Section 708(b)(2)(A) or 708(b)(2)(B), IRC. 
  •  If the reorganization did not result in the continuation of a prior partnership, leave the type or reorganization entry 
   line blank. 
 
Part I – Calculation of Tax Due or Refund 
 
■ Line 1. Partnership Entity-Level Tax – Partnerships that make the election to pay tax at the entity level must 
  complete Schedule 3-ET, Entity-Level Tax Computation, and include the amount of tax from Schedule 3-ET, line 
  21 on Form 3, line 1. See Schedule 3-ET instructions for information detailing how the electing partnership deter-
  mines income at the entity level and computes the entity-level tax. 
■ Line 2. Amended Return - Amount Previously Refunded - Complete this line only if this is an amended 2024 
  Form 3. Fill in the refund from your original 2024 return.  
  If your refund was reduced because you owed underpayment interest or any penalties, fill in the amount of your 
  refund before the reduction for underpayment interest or penalty. If your 2024 return was adjusted by the depart-
  ment, fill in the refund shown on the adjustment notice you received.  
■ Line 3. Interest, Penalty, and Late Fee Due - Enter any interest due from Schedule U, line 15 or 29. Check the 
  designated space if you computed underpayment interest using the annualized income installment method on 
  Schedule U, page 2, part IV. Amended Return: If you previously were assessed interest for underpayment of 
  estimated taxes, complete an amended Schedule U, based on the total amount shown on the amended Form 3, 
  line 1. Enter the difference between the underpayment interest from the amended Schedule U and the original 
  Schedule U. Show an overpayment as a negative number. Include Schedule U with your amended return.  

  If you don’t timely file a franchise or income tax return that you are required to file, or if you file an incorrect return 
  due to negligence or fraud, interest, penalties, and late fees may be assessed against you. The interest rate on 
  delinquent taxes is 18% per year. Civil penalties may be as much as 100% of the amount of tax not reported on 
  the return. Criminal penalties for filing a false return include a fine of up to $10,000 and imprisonment. 

■ Line 5. Wisconsin Tax Withheld – Enter the amount of Wisconsin income or franchise tax withheld on your behalf. 

  Include documents (e.g. Form WT-11 or Schedule 3K-1) with your Form 3 to substantiate the withholding claimed 
  on line 5. 
  Form WT-11 Payments 
  An entertainment partnership that made a deposit using Form WT-11 or had amounts withheld on its behalf by an 
  employer using Form WT-11 may enter the deposit or withholding on line 5, or it may elect to allocate the deposit 
  or withholding to its nonresident entertainer partners but only to the extent the income subject to withholding is 
  allocated to those partners. For more information about allocating this withholding to your nonresident entertainer 
  partners, see Form PW-1 and instructions. 

  Withholding from Form W-2G 
  If the partnership has Wisconsin withholding from lottery prizes or other gambling winnings, enter on line 5 the 
  amount of Wisconsin withholding reported on Form W-2G for the partnership.  
  Pass-Through Withholding 
  A partnership that makes an election to pay tax at the entity level and has amounts withheld on its behalf by a 
  lower-tier entity may enter the lower-tier withholding on line 5, provided the partnership does not report any amount 
  of withholding to its partners on Schedules 3K-1. 

IP-130 (R. 11-24) 

                                   2024 Wisconsin Form 3 Instructions                                                                Page 19 

  Caution: Do not include any deposit or withholding on line 5 that is passed through to your partners on Schedules 
  3K-1. 
                                                                                                                                              
■ Line 6. Estimated Tax Payments – Enter estimated tax payments made, and overpayment applied from the prior 
  year’s return, minus any “quick refund” applied for on Form 4466W, Wisconsin Corporation or Pass-Through Entity 
  Application for Quick Refund of Overpayment of Estimated.  
■ Line 7. Amended Return - Amount Previously Paid - Complete this line only if this is an amended 2024 Form 3. 
  Fill in the amount of tax you paid with your original Form 3 plus any additional amounts paid after it was filed. 
  If you did not pay the full amount shown on your original Form 3, fill in only the portion that you actually paid. Also, 
  include any additional tax that may have resulted if your original return was changed or audited. This includes 
  additional tax paid with a previously filed 2024 amended return and additional tax paid as a result of a department 
  adjustment to your return. Do not include payments of interest or penalties. 
■ Line 9. Amount Due - If line 4 is larger than line 8, enter the amount owed. See the department's Make a Payment 
  webpage for information about making payments. 
■ Lines 13 and 14. Wisconsin Property and Total Company Property – Enter the total amount of the company’s 
  real and tangible property located in Wisconsin and the company’s total amount of real and tangible property eve-
  rywhere. Use the cost basis of the property at the end of the year. Include the following types of property: 
  •  Land 
  •  Buildings 
  •  Furniture and Fixtures 
  •  Transportation equipment 
  •  Machinery and other equipment 
  •  Inventories 
  Include only property that is owned by the partnership; you do not need to include property you are renting. 

■ Lines 15 and 16. Wisconsin Payroll – Wisconsin Payroll and Total Company Payroll – Enter the total amount 
  of the company’s payroll located in Wisconsin and the company’s total amount of payroll everywhere. Include only 
  amounts attributable to employees of the partnership. In the computation of payroll located in Wisconsin, include 
  individuals that satisfy one or more of the following: 
  •  The individual’s service is performed entirely in Wisconsin. 
  •  The individual’s service is performed in and outside Wisconsin, but the service performed outside Wisconsin is 
   incidental to the individual’s service in Wisconsin. 
  •  A portion of the individual’s service is performed in Wisconsin and the base of operations of the individual is in 
   Wisconsin. 
  •  A portion of the individual’s service is performed in Wisconsin and, if there is no base of operations, the place 
   from which the individual’s service is directed or controlled is in Wisconsin. 
  •  A portion of the individual’s service is performed in Wisconsin and neither the base of operations of the individual 
   nor the place from which the service is directed or controlled is in any state in which some part of the service is 
   performed, but the individual’s residence is in Wisconsin. 

■ Lines 17 and 18. Wisconsin Sales and Total Company Sales– Enter the amount of your Wisconsin sales. If not 
  apportioning income, enter your total company sales. If apportioning income, enter your Wisconsin sales from the 
  apportionment schedule used, Schedule A-01 through A-11. For purposes of the sales factor, sales include, but 
  are not limited to, the following items related to the production of apportionable income: 
  •  Gross receipts from the sale of inventory. 
  •  Gross receipts from the operation of farms, mines, and quarries. 
  •  Gross receipts from the sale of scrap or by-products. 

IP-130 (R. 11-24) 

                                     2024 Wisconsin Form 3 Instructions                                                                Page 20 

  •  Gross commissions. 
  •  Gross receipts from personal and other services. 
  •  Gross rents from real property or tangible personal property. 
  •  Interest on trade accounts and trade notes receivable. 
  •  A member’s share of a limited liability company’s gross receipts or a partner’s share of a partnership’s gross 
    receipts. 
  •  Gross management fees. 
  •  Gross royalties from income producing activities. 
  •  Gross franchise fees from income producing activities. 
“Gross receipts” means gross sales less returns and allowances, plus service charges, freight, carrying charges, or 
time-price differential charges incidental to the sales. Federal and state excise taxes, including sales and use taxes, 
are included as part of the receipts if the taxes are passed on to the buyer or included as part of the selling price. 

■ Line 19. Wisconsin Apportionment Percentage – 
  •  If the partnership is engaged in business wholly within Wisconsin and is not using separate accounting, enter 
    “100.0000%” on line 19 and check the 100% apportionment box. No apportionment or separate accounting 
    schedule is required.  
  •  If the partnership is using separate accounting, check the separate accounting box and include Form C,       Wis-
    consin Allocation and Separate Accounting Data, and Form N,           Wisconsin Nonapportionable, Separately Ac-
    counted, and Separately Apportioned Income, as appropriate, with Form 3. 
  •  If the partnership is engaged in business both within and without Wisconsin and has business income subject 
    to apportionment under sec. 71.04, Wis. Stats., enter the apportionment schedule used and the apportionment 
    percentage, as appropriate. For example, a partnership using Schedule A-01,       Wisconsin Single Sales Factor 
    Apportionment Data for Nonspecialized Industries, with a Wisconsin apportionment percentage of 25% enters 
    "01" and "25.0000%" in the space provided. Include the apportionment schedule with Form 3.  
  •  If the partnership is engaged in business both within and without Wisconsin and using both apportionment and 
    separate accounting, enter the apportionment schedule number and apportionment percentage on Form 3, line 
    19, and check the separate accounting box. Complete and include the appropriate apportionment schedule with 
    Form 3. Include Form C and Form N, as appropriate, with Form 3. 

  For information on income subject to apportionment and income not subject to apportionment, see Schedule 3K-1 
  instructions. 

■ Line 20. Reportable Transaction Disclosure Statement – If a partnership was required to include any form with 
its federal tax return to disclose a “reportable transaction,” as defined under sec. 71.81(1)(c), Wis. Stats. it, must file 
a copy of that form with the department within 60 days of the date it is required to file it for federal income tax purposes, 
provided that it is otherwise required to file a Wisconsin return. This includes federal Form 8886, Reportable Trans-
action Disclosure Statement. 
Include the form(s) with your return or send a paper copy of the form(s), separate from your Form 3, to the following 
address: Wisconsin Department of Revenue, Tax Shelters Program, PO Box 8906, Madison, WI 53708-8906. 

■ Line 21. Use Tax – Tangible personal property, certain coins and stamps, certain leased properties affixed to real 
estate, certain digital goods, and selected services, taxable under Wisconsin’s sales tax law, which are stored, used, 
or consumed in Wisconsin, are subject to use tax if the proper sales tax is not paid. 

IP-130 (R. 11-24) 

                                     2024 Wisconsin Form 3 Instructions                                                                Page 21 

Part II - Schedule 3K – Partners’ Distributive Share Items 
 
Schedule 3K, Columns (b) Through (d) 

Schedule 3K is a summary schedule of all the partners’ shares of the partnership’s income, deductions, credits, etc., 
as computed under Wisconsin law, similar to federal Schedule K. 

■ Column b. Federal Amount – Enter the applicable amounts from federal Schedule K in column b of Schedule 3K. 
 For dividends and the net long-term capital gain (loss) items reported on lines 6 and 9, use the totals from federal 
 Schedule K. 

■ Column c. Adjustment –       Enter in column c any adjustments to the federal amount necessary to arrive at the 
  amount under Wisconsin law. Use Form 3, Schedule 3K, Part III – Partners' Share of Additions and Subtractions 
  to account for the additions and subtractions. For additional details, see Part III - Specific Instructions for Schedule 
  3K – Partners' Share of Additions and Subtractions later in these instructions. However, note the following: 

  •  Do not exclude a nonresident or part-year resident partner’s share of partnership items that are attributable to 
   business transacted outside Wisconsin, services performed outside Wisconsin, or real or tangible personal prop-
   erty located outside Wisconsin. These adjustments will be made on the Schedule 3K-1 of each affected partner, 
   see the Schedule 3K-1 instructions. 
  •  Do not make any adjustments on Schedule 3K (or on Schedule 3K-1) for an individual, estate, or trust partner’s 
   capital gain deduction or capital loss limitation. Instead, each partner will compute its own capital gain deduction 
   or loss limitation on Wisconsin Schedule WD. 
  For any adjustments you enter in column c, you must prepare Form 3, Schedule 3K, Part III – Partners' Share of 
  Additions and Subtractions to account for the additions and subtractions and include it with your return. For exam-
  ples of the adjustments that you are required to enter in column c, see    Adjustments Reportable on Schedule 3K, 
  Column (c) later in these instructions. 

■ Column d. Wisconsin Amount – Combine the amount in column b with any adjustment in column c and enter the 
  result in column d. 

Adjustments Reportable on Schedule 3K, Column (c) 

You must make adjustments on Schedule 3K, column c in the following situations: 

When a Provision of Federal Law Doesn’t Apply for Wisconsin Purposes.         You must make an adjustment if an 
amount in column b is computed under a provision of the IRC that was not adopted for Wisconsin purposes, as 
described earlier in these instructions (e.g. bonus depreciation has not been adopted by Wisconsin). For gains and 
losses on sales of depreciable or amortizable assets, you will need to compute an adjustment amount in cases where 
your asset basis for federal purposes was different than your asset basis for Wisconsin purposes due to differences 
in depreciation and amortization. 
These adjustments are often called “Schedule I adjustments” because individuals must report them on Wisconsin 
Schedule I. Identify the adjustments and provide that information to the individual partners on Schedule 3K-1. 
As mentioned earlier in these instructions, Wisconsin has not fully adopted the Internal Revenue Code (IRC) as 
amended to December 31, 2022. If the federal amount in column b is affected by an IRC provision not adopted by 
Wisconsin, an adjustment must be computed in column c. For further information about the differences between 
federal and Wisconsin tax provisions, see the section titled Conformity with Internal Revenue Code and Exceptions 
earlier in these instructions. 
Adjustments required because different elections are made for federal and Wisconsin purposes. Examples 
of different elections include the following: 

•  For property placed in service after December 31, 1982, a taxpayer that claimed investment tax credit for federal 
  purposes could either (a) claim the full 10% credit and reduce the depreciable basis of the property by one-half of 
  the credit, or (b) in the case of regular investment tax credit property, claim a reduced credit and depreciate the 
  full cost of the property. A partnership that claimed the regular investment tax credit and reduced the depreciable 

IP-130 (R. 11-24) 

                                   2024 Wisconsin Form 3 Instructions                                                                Page 22 

 basis of the property for federal purposes could compute depreciation on the full (unreduced) basis of the property 
 for Wisconsin purposes. 
•  Wages that aren’t deductible for federal purposes because they were used in computing certain federal wage tax 
 credits may be deducted for Wisconsin purposes. 
  
•  For more information about making different elections for Wisconsin and federal purposes, see article titled Making 
 a Different Federal Election for Wisconsin, on page 8 of Wisconsin Tax Bulletin 214 (July 2021). 

Adjustments Required for Modifications Prescribed in Wisconsin Law. Most modifications required to compute 
a partner’s Wisconsin net income are computed by that partner rather than at the partnership level. This includes 
many of the modifications prescribed in sec. 71.05(6) to (26), Wis. Stats. However, several types of modifications 
may be reportable by the partnership in column c. These modifications are described next. 

Modifications Prescribed in Wisconsin Law 

The following are examples of Wisconsin modifications that may be required in Schedule 3K, column c. 

Tax Credit Amounts. Certain tax credits computed by the partnership are required to be added back to the partner-
ship’s ordinary income (line 1). These credits include the following: 
•  Business development credit 
•  Community rehabilitation program credit 
•  Development zones credits 
•  Economic development tax credit 
•  Electronics and information technology manufacturing zone credit  
•  Employee college savings account contribution credit 
•  Enterprise zone jobs credit 
•  Manufacturing and agriculture credit (computed in 2023) 
•  Research expense credit 

State Taxes. For Wisconsin purposes, state taxes and taxes of the District of Columbia that are value-added taxes, 
single business taxes, or taxes on or measured by all or a portion of net income, gross income, gross receipts, or 
capital stock are not deductible by partnerships. 
Related Entity Expenses. A partnership must make an addition modification to “add back” interest, rental, intangible 
expenses, or management fees paid, accrued, or incurred to a related entity. After the partnership makes this addition 
modification, the partnership completes Schedule RT to determine if it is eligible for a deduction for any of the amount 
added back. The partnership then makes a subtraction modification in the amount for which it is eligible for a deduc-
tion. 
See the Schedule RT instructions for further details of the expenses that require this modification and the specific 
criteria that must be met in order to deduct related entity interest, rental, or intangible expenses or management fees. 

The partnership reports the addition modifications for related entity expenses  on Schedule 3K, line 22a. For the 
amount eligible for a deduction, the partnership enters the subtraction amount on Schedule 3K, line 22b. Additionally, 
these amounts must be reported as adjustments in column c on the lines to which the expenses relate. For example, 
if the related entity rental expense is an item of ordinary income, the modifications must also be reported on Sched-
ule 3K, line 1, column c as computed on Schedule 3K – Partners' Share of Additions and Subtractions. 

Income from Expenses Disallowed to Related Entity.      If the partnership has interest, rental, or intangible income 
or management fees from a related entity, and that related entity was ineligible to claim a deduction for the interest, 
rental, or intangible expenses or management fees because it did not meet the criteria set forth in Schedule RT, the 
partnership may make a subtraction modification to exclude the income corresponding to the expense that the payor 
could not deduct. The partnership makes the subtraction on the line of Schedule 3K corresponding to the type of 
income being modified. 

IP-130 (R. 11-24) 

                                   2024 Wisconsin Form 3 Instructions                                                                Page 23 

Certain Basis Differences. Certain basis differences are treated as modifications. For example, for Wisconsin pur-
poses, property taxes paid on vacant land had to be capitalized for 1964 and prior taxable years. A transitional 
adjustment must be made for this basis difference upon disposition of the property. Recompute the gain or loss on 
federal Form 4797 or federal Schedule D, as appropriate, by substituting the Wisconsin basis for the federal basis. 
Show the difference as a modification in column c. 

Basis, Depreciation and Bonus Depreciation Differences  . Difference in federal and Wisconsin basis of depreci-
ated or amortized assets: 

For taxable years beginning on or after January 1, 2014, for purposes of computing depreciation, depletion, and 
amortization, the Internal Revenue Code means the federal Internal Revenue Code in effect on January 1, 2014. 

The provision that property required to be depreciated for taxable year 1986 under the Internal Revenue Code as 
amended to December 31, 1980, to continue to be depreciated under the Internal Revenue Code as amended to 
December 31, 1980, is limited to taxable years beginning before January 1, 2014. 

Note: Wisconsin has not adopted federal bonus depreciation provisions. For Wisconsin purposes, depreciation, 
depletion, and amortization is computed based on the Internal Revenue Code in effect on January 1, 2014. Bonus 
depreciation was not in effect on January 1, 2014. 

Differences in Taxable Interest Income. If the tax-exempt interest income reported on line 18a, column b, includes 
any interest that is exempt for federal purposes but taxable by Wisconsin (such as state and local government bond 
interest) report this amount as an addition on line 5, column c, and as a subtraction on line 18a, column c. 

If the interest income reported on line 5, column b, includes any interest from obligations of the United States gov-
ernment and its instrumentalities, do not subtract this amount on Schedule 3K, line 5, column c. Instead, identify this 
amount on a separate schedule for line 20c. 

Caution: Do not subtract interest income from obligations of the United States government and its instrumentalities 
from interest income on Schedule 3K, line 5, column c. This income is taxable to partners who are subject to Wis-
consin franchise tax.  
                                                                                                                      
Differences for Other Income and Expense Items. Income reported on line 18b that is exempt for federal purposes 
but taxable by Wisconsin is shown as a subtraction in column c. If more income is nontaxable for Wisconsin purposes 
than for federal purposes, show the additional amount of exempt income as an addition. The amount under Wisconsin 
law in column d is the amount of tax-exempt income for Wisconsin purposes. 

Expenses on line 18c that are nondeductible federally but deductible for Wisconsin purposes are shown as subtrac-
tions in column c. If more expenses are nondeductible for Wisconsin purposes than for federal purposes, show the 
additional amount of nondeductible expenses as an  addition. The amount under Wisconsin law in column d is the 
nondeductible expense for Wisconsin purposes. 

Guaranteed Payments Reported on Line 4 

Enter guaranteed payments for services performed by partners on line 4a and guaranteed payments for use of part-
ners' capital on line 4b. 

Credits Reportable on Schedule 3K, Line 15 
To determine if you are eligible for any of the credits in lines 15a through 15h, see Publication 123, Business Tax 
Incentives  , or refer to the instructions to the credit schedules referenced below. Except as otherwise indicated, you 
must include the credit schedule referenced below and required supporting documents with your Form 3 in order to 
claim the credits on Schedule 3K. Enter the abbreviation of the credit you are claiming next to the word "schedule" 
on line 15. The abbreviation for each credit is located in the upper-left hand corner of the credit schedule and in 
parenthesis in the list below. Use a separate line for each credit you are claiming. For example, if you are claiming 
the enterprise zone jobs credit, enter "EC" next to the "Schedule" line. See exceptions below: 

IP-130 (R. 11-24) 

                                                                   2024 Wisconsin Form 3 Instructions                                                                Page 24 

                                For the following credits, enter the code indicated below instead of the abbreviation from credit schedule: 
                                 
                                •  Angel Investment Credit – VCA 
                                •  Early Stage Seed Investment Credit – VCE 
                                •  Regular Research Credit –  R
                                •  Research credit related to designing internal combustion engines for vehicles, including expenses related to de-
                                   signing vehicles that are powered by such engines and improving production processes for such engines and 
                                   vehicles – RIC 
                                •  Research credit related to the design and manufacturing of energy efficient lighting systems, building automation 
                                   and control systems, or automotive batteries for use in hybrid−electric vehicles, that reduce the demand for nat-
                                   ural gas or electricity or improve the efficiency of its use - REE 

                                Credits: 

                                ■ Angel Investment Credit (VCA) – Enter the angel investment credit from Schedule VC, line 4. 

                                ■ Business Development Credit (BD) – Enter the business development credit from Schedule BD, line 3. 

                                ■ Community Rehabilitation Program Credit (CM) –Enter the community rehabilitation program credit from Sched-
                                  ule CM, line 5. 

                                ■ Development Zone Capital Investment Credit (DC) – Enter the development opportunity zone or agricultural or 
                                 airport development zone capital investment credit from Schedule DC, line 15. 

                                ■ Development Zones Credit (DC) – Enter the development zones credit from Schedule DC, line 7. 

                                ■ Early Stage Seed Investment Credit (VCE) –     Enter the early stage seed investment credit from Schedule VC, 
                                 line 11. 

                                ■ Economic Development Tax Credit (ED) – Enter the economic development tax credit from Schedule ED, line 4. 

                                ■ Electronics and Information Technology Manufacturing Zone Credit (EIT) – Enter the credit certified by the 
                                  Wisconsin Economic Development Corporation from Schedule EIT, line 5. 

                                ■ Employee College Savings Account Contribution Credit (ES) – Enter the employee college savings account 
                                  contribution credit from Schedule ES, line 4.  

                                ■ Enterprise Zone Jobs Credit (EC) – Enter the enterprise zone jobs credit from Schedule EC, line 3. 

                                ■ Low-Income Housing Tax Credit (LI) – Enter the low-income housing credit from Schedule LI, line 3. 

                                ■ Manufacturing Credit (MA-M) – Enter the manufacturing credit from Schedule MA-M, lines 18 or 18b. 

                                ■ Agriculture Credit (MA-A) – Enter the agriculture credit from Schedule MA-A, lines 18 or 18b. 

Research Expense Credit (R)   ■                                – Enter the research expense credit from line 16 or 16b of Schedule R. 

                                ■ Supplement to Federal Historic Rehabilitation Credit (HR) – Enter the supplement to the federal historic reha-
                                  bilitation tax credit from Wisconsin Schedule HR. See the Schedule HR instructions for more information. 

                              ■ Line 15i. Credit for Tax Paid to Other States –  If the partnership does business in another state and either the 
                                  partnership or its partners must pay an income tax on the partnership’s income earned there, Wisconsin resident 
                                  partners may be able to claim credit on their individual income tax returns for their pro rata shares of the tax paid. 
                                  Credit is allowed only if the income taxed by the other state is considered taxable income by Wisconsin. Fill in 
                                  line 15i if: 

                                  •  The partnership files a combined or composite return with that state on behalf of the partners who are nonresi-
                                   dents of that state and pays the tax on their pro rata shares of the partnership’s income earned there. 

                                IP-130 (R. 11-24) 

                                  2024 Wisconsin Form 3 Instructions                                                                Page 25 

  •  The partnership files a partnership income tax return with that state and pays tax on the income earned there 
    that is attributable to the partners who are nonresidents of that state. 

   Caution: A partnership that makes an election to pay tax at the entity level in Wisconsin may not pass 
   through a credit for taxes paid to other states and partners may not use taxes paid by the partnership, includ-
   ing taxes paid on a partner's behalf on a composite return, to compute a credit for taxes paid to other states. 
   In addition, a resident partner may not claim a credit for taxes the partner paid to another state on income 
   taxed at the entity level in Wisconsin. 
                                                                                                                      
  Enter the postal abbreviation of the state in the space provided and the amount of income tax paid to that state. If 
  tax is paid to more than three states, enter “See Attached” on one of the entry lines, enter the total amount on that 
  line, and include a schedule listing all states and the amount of income tax paid to each state. Include with Form 3 
  a copy of the income tax return filed with each state for which a credit is claimed. 

  If a tax-option (S) corporation, limited liability company, or partnership filed its own income or franchise tax return 
  with another state and paid tax on its income to that state, an individual partner generally uses Part III of Schedule 
  OS to calculate their credit for net taxes paid to other states. The amount of income to include in the computation 
  of Part III would generally be the individual's pro rata share of the amount of income the entity paid tax to the other 
  state. The entity should provide this information to the individual so that they may compute the appropriate amount 
  of credit for net tax paid to other states.  

  Note: The amount of eligible qualified production activities income that may be claimed in computing the manufac-
  turing and agriculture credit is reduced by the amount of the qualified production activities income taxed by another 
  state upon which a credit for taxes paid to the other state is claimed. The partnership will need to provide the 
  partners with the amount of eligible qualified production activities income upon which their share of the credit for 
  tax paid to another state was computed so they may use this information when completing their tax returns.   

■ Line 15j. Wisconsin Tax Withheld – If the partnership is subject to withholding tax on the Wisconsin income of 
  nonresident partners, enter, the amount of Wisconsin tax withheld.  
 
 Caution: On line 15j of Schedule 3K, do not include any withholding already claimed on line 5 in Part I of Form 3. 
                                                                                                                                             
■ Line 16. Federal Schedule K-2 – If the partnership has items of international tax relevance, check this box and 
include federal Schedule K-2 (Form 1065) with Form 3. If there are differences between the federal and Wisconsin 
amounts reported on Schedule K-2, include a statement to explain the differences. 

“Other Items and Amounts” Reportable on Schedule 3K, Item 20c 

For line 20c, include a schedule showing any items and amounts not included on lines 1 through 20b that must be 
reported separately to the partners. Include the federal amount, any adjustment, and the amount determined under 
Wisconsin law for each item. Amounts that may be included on this schedule include, but are not limited to, the 
following: 

U.S. Government Interest. If the interest income on line 5, column b, includes any interest from United States gov-
ernment obligations that is taxable for federal purposes but exempt from Wisconsin income taxes, report the amount 
of United States government interest on this schedule. 

Disposal of Section 179 Property. If the partnership disposed of property for which a section 179 expense deduc-
tion was claimed in a prior year, provide the following information for each asset: description of the property; gross 
sales price; both the federal and the Wisconsin cost or other basis plus expense of sale (excluding the partnership’s 
basis reduction in the property due to the section 179 expense deduction); depreciation allowed or allowable (exclud-
ing the section 179 expense deduction); and both the federal and Wisconsin amount of section 179 expense deduc-
tion passed through in previous years for the property and the partnership’s taxable years for which the amounts 
were passed through. 

IP-130 (R. 11-24) 

                                 2024 Wisconsin Form 3 Instructions                                                                Page 26 

Manufacturing and agriculture credit information.  If the partnership computed the manufacturing and agriculture 
credit on Schedule MA-M and/or MA-A, include on line 20c the amount of income that was used to compute the 
manufacturing and agriculture credit so that the partners can use this information when completing Schedule MA-M 
or MA-A, Part II, Computation of Business Income Limitation for individuals and fiduciaries, if required. 

The amount of eligible qualified production activities income that may be claimed in computing the manufacturing 
and agriculture credit is reduced by the amount of the qualified production activities income taxed by another state 
upon which a credit for taxes paid to the other state is claimed. The partnership will need to provide the partners with 
the amount of eligible qualified production activities income upon which their share of the credit for tax paid to another 
state was computed so they may use this information when completing their tax returns. 
 
Business moving expenses. The amount deducted under the Internal Revenue Code as moving expenses, as 
defined in sec. 71.01(8j), Wis. Stats., paid or incurred during the taxable year to move the taxpayer's Wisconsin 
business operation, in whole or in part, to a location outside Wisconsin or to move the taxpayer's business operations 
outside the United States, must be added back to Wisconsin income. 
 
Schedule 3K, Lines 21 Through 24 

■ Line 21. Foreign Taxes Paid or Accrued – On line 21, enter foreign taxes paid or accrued. 
■ Lines 22a and 22b. Related Entity Expenses – On line 22a, enter in column d the amounts attributable to interest, 
  rental, intangible expenses, or management fees paid, accrued, or incurred to a related entity. On line 22b, enter 
  the amounts eligible for a deduction as determined by the Schedule RT instructions. If line 22a exceeds $100,000, 
  the partnership must include Schedule RT with its Form 3. See the Schedule RT instructions for details. 
■ Line 23. Income (Loss) – For each of columns b and d, combine lines 1 through 11. From the result, subtract the 
  sum of lines 12 and 13a through 13e. Add or subtract, as appropriate, any income or deductions reported on 
  line 20c that affect the computation of taxable income. 

  If you reported on line 20c the disposition of property for which a section 179 expense deduction was claimed in a 
  prior year, complete federal Form 4797 to figure the amount of gain or loss to combine with the other items of 
  income, loss, and deduction. If the federal and Wisconsin bases of the property or section 179 deductions differ, 
  use two Forms 4797. Disregard the special instructions for partnerships and partners when filling out Form 4797. 
  On one Form 4797, determine the federal gain or loss to combine with the other federal amounts reported in col-
  umn b. Complete a second Form 4797 to compute the Wisconsin gain or loss to combine with the other Wisconsin 
  amounts reported in column d. 
■ Line 24. Gross Income –  Enter the partnership’s gross income that is reportable to Wisconsin. Gross income is 
  the total amount received from all activities, before deducting the cost of goods sold or any other expenses. Gross 
  income includes gross receipts from trade or business activities, gross rents and royalties, interest and dividends, 
  the gross sales price of assets, and all other gross receipts. If the partnership is a member of one or more other 
  pass-through entities, include gross income attributable to those other pass-through entities. 

Third Party Designee 

If you want to allow a tax preparer or tax preparation firm, or any other person you choose to discuss your 2024 tax 
return with the department, check “Yes” in the “Third Party Designee” area of your return. Also, fill in the designee’s 
name, phone number, and any five digits the designee chooses as their personal identification number (PIN). If you 
check “Yes,” you are authorizing the department to discuss with the designee any questions that may arise during 
the processing of your return. You are also authorizing the designee to:  

•  Give the department any information missing from your return,  
•  Call the department for information about the processing of your return or the status of your refund or payment(s), 
  and  
•  Respond to certain department notices about math errors, offsets, and return preparation.  
You are not authorizing the designee to receive any refund check, bind you to anything (including any additional tax 
liability), or otherwise represent you before the department. If you want to expand the designee’s authorization, you 

IP-130 (R. 11-24) 

                                      2024 Wisconsin Form 3 Instructions                                                                Page 27 

must submit Form A-222,   Power of Attorney. The authorization will automatically end no later than the due date 
(without regard to extensions) for filing your 2025 tax return. 

Contact Person – Enter the name, telephone number and fax number of the person the department should contact 
with any questions regarding this return. 

Submitting Your Form 3 

Signatures. A general partner of the partnership or an LLC member must sign the form on page 4. If the return is 
prepared by someone other than an employee of the partnership, the preparer’s signature is also required. 

Supporting Documentation. Include the following items with your Form 3: 
•  Federal Form 1065. (may be submitted as .pdf document with electronic returns) 
•  Supporting schedules (supporting schedules that are not department-prescribed forms may be submitted as .pdf 
 documents with electronic returns). 
•  Wisconsin Schedule 3K-1 or federal Schedule K-1 for each partner. 
•  Any extension of time to file. 
•  If the partnership has a nonresident partner who is not subject to income or franchise tax and would otherwise be 
 subject to withholding tax based on income passed through to that partner, include a statement from that partner 
 stating why no tax was withheld. 
•  If you are filing Form 3 on paper because you submitted an electronic waiver request to the department and it was 
 approved, do not staple, fasten, or bind these supporting documents to your return. Use paper clips in-
 stead. 
 
Part III - Specific Instructions for Schedule 3K – Partners' Share of 
Additions and Subtractions

The purpose of this schedule is to provide detail for the amounts entered on lines 1 through 13e, column c, of Sched-
ule 3K. The total amount from this schedule should equal the amount of the adjustments reported on lines 1 through 
13e in column c of Schedule 3K.  
 
For many situations, the amounts from the additions/subtractions schedule will be entered in column c, line 1 or 2 of 
Schedules 3K and 3K-1.  
 
If a taxpayer only has ordinary income, the net addition/subtraction will be entered on line 1, column c of Schedules 
3K and 3K-1. Conversely, if the taxpayer only has net rental income, the net addition/subtraction will be entered on 
line 2, column c of those schedules.  
If the taxpayer has both ordinary business income and rental real estate income, the net addition/subtraction should 
be allocated between column c, lines 1 and 2 of Schedules 3K and 3K-1.  
 
For situations where a taxpayer has multiple sources of income and is required to make numerous adjustments in 
column c, the appropriate addition/subtraction adjustment should be made on each income/expense line in column c 
of Schedules 3K and 3K-1. The total adjustments made to column c should equal the total adjustment on the new 
addition/subtraction schedule.  
 
Schedule I adjustments 
 
If the amounts entered on Part III are the result of a federal law change that has not been adopted by Wisconsin (e.g. 
bonus depreciation) identify it as a Schedule I adjustment. The individual partners will account for the adjustment on 
Schedule I instead of as a modification on Schedule AD, Form 1 – Additions to Income, or Schedule SB, Form 1 – 
Subtractions from Income. 
 
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                                       2024 Wisconsin Form 3 Instructions                                                                Page 28 

Additions: 

■ Line 1. State Taxes – Enter taxes imposed by Wisconsin, any other state, and the District of Columbia that are 
value-added taxes, single business taxes, or taxes on or measured by net income, gross income, gross receipts, or 
capital stock and that were deducted in computing federal taxable income.  
 
■ Line 2. Related Entity Expenses –       A partnership must make an addition modification to “add back” expenses 
attributable to transactions with related parties. The expenses that must be added back include the following, if paid, 
accrued, or incurred to a related entity: 
•  Interest expenses 
•  Rent expenses 
•  Management fees 
•  Intangible expenses 
 
Partnerships that are members, or beneficiaries of pass-through entities must include on line 2 their share of the pass 
through entity’s related entity expenses shown on line 22a of Schedule 3K-1. 
 
Note: If the partnership meets one of the specific conditions provided in the Wisconsin Statutes, the partnership may 
take a subtraction modification on line 9 for some or all of the amount added back on this line. See the instructions 
for line 9 for details.  
 
Definitions Applicable to Line 2. In determining whether an addback of related entity expenses is necessary, the 
following definitions apply:   
 
“Related entity”   –A related person under one of the following sections of the Internal Revenue Code (IRC): 
•  Section 267(b), which defines relationships through which taxpayers would be considered “related” for purposes 
  of the disallowance of deduction or loss on transactions between related taxpayers  
•  Section 1563, relating to controlled groups of corporations, which is incorporated into sec. 267 by reference  
•  Section 707(b), relating to partners of partnerships, which is also incorporated into sec. 267 by reference 
A "related entity" also includes certain real estate investment trusts (REITs) if they are not "qualified REITs." For more 
on qualified REITs, see questions A2 and A3 on page 17 of Wisconsin Tax Bulletin 158 (October 2008). 
 
“Interest expenses”   –  Interest that would otherwise be deductible under sec. 163, IRC, and otherwise deductible in 
the computation of Wisconsin income. 
 
“Rent expenses”      –Gross amounts that would otherwise be deductible under the IRC, as modified for Wisconsin 
purposes, for the use of, or the right to use, real property and tangible personal property in connection with real 
property, including services rendered in connection with such property, regardless of how reported for financial ac-
counting purposes and regardless of how computed. 
“Management fees” – Expenses and costs, not including interest expenses, pertaining to accounts receivable, ac-
counts payable, employee benefit plans, insurance, legal matters, payroll, data processing, purchasing, taxation, 
financial matters, securities, accounting, or reporting on compliance matters or similar activities, to the extent that the 
amounts would otherwise be deductible in determining net income under the IRC as modified for Wisconsin purposes. 
 
“Intangible expenses” – Any of the following, to the extent the amounts would otherwise be deductible in determin-
ing net income under the IRC as modified for Wisconsin purposes: 
•  Expenses, losses, or costs for, related to, or directly or indirectly in connection with, the acquisition, use, mainte-
  nance, management, ownership, sale, exchange or any other disposition of intangible property 
•  Losses related to, or incurred in connection directly or indirectly with, factoring transactions or discounting trans-
  actions 
•  Royalty, patent, technical, and copyright fees 
•  Licensing fees 

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                                 2024 Wisconsin Form 3 Instructions                                                                Page 29 

If a partnership purchases an amortizable intangible asset from a related entity, the amortization expenses on that 
asset are considered intangible expenses and should be added back.  
 
Schedule RT Filing Requirement for Amount on Line 2. If the amount a partnership reports on line 2 exceeds 
$100,000, the partnership must include Schedule RT, Wisconsin Related Entity Expenses Disclosure Statement, with 
its return. However, for partnerships using apportionment, you may multiply the amount on line 2 by the apportionment 
percentage for purposes of determining whether you meet the $100,000 threshold for filing Schedule RT.  
 
■ Line 3. Expenses Related to Nontaxable Income –   Enter expenses included in federal taxable income that are 
directly  or indirectly related to nontaxable income. Include a schedule with your return showing the payers and 
amounts of nontaxable income and explaining why that income isn’t taxable. 

Interest, dividends, and capital gains from the disposition of intangible assets are nontaxable if both of the following 
are true: 
•  The operations of the payer are not unitary with those of the payee, and 
•  The payer and payee are not related as parent company and subsidiary or affiliates and the investment activity 
  from which the income is received is not an integral part of a unitary business. 
Income may also be nontaxable under the principles of the U.S. Supreme Court decision in Allied-Signal v. Director, 
Div. of Taxation, 504 U.S. 768 (1992), if the investment is passive and does not serve an operational function. 
 
Examples of expenses related to nontaxable income include taxes, interest, and administrative fees related to the 
production of nontaxable income. 
 
Also enter on this line any losses included in federal taxable income from disposing of assets, if gains from disposing 
those assets would have been non-taxable income if the assets were disposed of at a gain. 
 
■ Line 4. Section 179, Depreciation Differences, Amortization of Assets –  

Section 179 expenses: 
Enter the amount by which the Wisconsin section 179 expense exceeds the federal section 179 expense.  
For taxable years beginning on or after January 1, 2014, sections 179, 179A, 179B, 179C, 179D, and 179E of the 
Internal Revenue Code, related to expensing of depreciable business assets, apply for Wisconsin tax purposes. 
"Internal Revenue Code" means the federal Internal Revenue Code in effect for the year in which the property is 
placed in service. 
 
For further information about the differences between the limitations for federal and Wisconsin purposes, see the 
section titled Conformity with Internal Revenue Code and Exceptions earlier in these instructions.  

Depreciation/Amortization (not section 179 expense):  

Enter the amount by which the federal deduction for depreciation or amortization exceeds the Wisconsin deduction. 
Include a schedule showing the computation details. 
 
These differences can happen because of IRC sections not adopted for Wisconsin purposes and also because of 
differences that existed between Wisconsin and federal law for assets placed in service before January 1, 1987.  
 
For 2014 and beyond, bonus depreciation was reinstituted by the federal government, and an adjustment is required 
to account for the depreciation difference because Wisconsin has not adopted federal bonus depreciation provisions. 
For Wisconsin purposes, depreciation, depletion, and amortization is computed based on the Internal Revenue Code 
in effect on January 1, 2014, and bonus depreciation was not in effect on that date. 
 
■ Line 5. Amount by Which the Federal Basis of Assets Disposed of Exceeds the Wisconsin Basis – Enter the 
amount by which the federal basis of assets disposed of exceeds the Wisconsin basis. If more than one asset is 
disposed of, you may combine the bases of the assets so that you need only one entry on this line. Include a schedule 
showing the computation details. 

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                                    2024 Wisconsin Form 3 Instructions                                                                Page 30 

For example, assume a partnership sold the following assets during the current taxable year: 

                     Federal Basis  Wisconsin Basis            Difference 
  Equipment               $1,500             $500                     $1,000 
  Machinery               $1,000             $2,000            ($1,000) 
  Building                $20,000            $10,000           $10,000 
  Totals                  $22,500            $12,500           $10,000 
 
The amount to enter would be $10,000. If the Wisconsin bases of the assets had exceeded the federal bases, an 
entry would be made on line 12.  
 
The modification may also apply in cases where a parent corporation disposes of subsidiary stock for which the basis 
is determined under Treas. Reg. sec. 1.1502-32. See sec. Tax 2.61(6)(f), Wis. Adm. Code, for details. 
 
■ Line 6. Addition for Credits Computed – Enter the total amount of credits from the list provided that you computed 
on your 2024 return. Note: The manufacturing and agriculture credit is the credit computed in 2023. 
■ Line 6a. Business development credit (Schedule BD) 
■ Line 6b. Community rehabilitation program credit (Schedule CM)  
■ Line 6c. Development zones credits (Schedule DC)  
■ Line 6d. Economic development credit (Schedule ED) 
■ Line 6e. Electronics and information technology manufacturing zone credit (Schedule EIT)  
■ Line 6f. Employee college savings account contribution credit (Schedule ES) 
■ Line 6g. Enterprise zone jobs credit (Schedule EC)  
■ Line 6h. Reserved for future use  
■ Line 6i. Manufacturing and agriculture credit (2023 Schedule MA-M and MA-A) 
■ Line 6j. Reserved for future use  
■ Line 6k. Research credits (Schedule R)  
■ Line 7. Other Additions – Enter any other additions that have not been accounted for in the preceding lines. List 
each addition separately and include a title describing the addition. 

Wisconsin has adopted the Internal Revenue Code (IRC) as amended to December 31, 2022, with exceptions. The 
IRC generally applies for Wisconsin purposes at the same time as for federal purposes.  For taxable years beginning 
on or after January 1, 2024, Wisconsin's definition of the IRC is the IRC as of December 31, 2022 with exceptions. 
 
For further information about the differences between federal and Wisconsin tax provisions, see the section titled 
Conformity with Internal Revenue Code and Exceptions earlier in these instructions. 
Subtractions: 

■ Line 9. Related Entity Expenses Eligible for Subtraction – If the partnership made an addition modification for 
related entity expenses on line 2, this is where you report the amount that qualifies for a deduction. Enter the amount 
of the expenses from line 2, that are deductible using the criteria described in Conditions for Deducting Related Entity 
Expenses, below.  
 
For partnerships that are members of another partnership, also include the amount of allowable related entity ex-
pense reported on line 22b of Schedule 3K-1. 
 
Conditions for Deducting Related Entity Expenses.      Section 71.80(23)(a)3., Wis. Stats., provides that a   related 
entity expense that was added back on line 2, qualifies for a deduction if all of the following conditions are met: 
•  The primary motivation for the transaction was one or more business purposes other than the avoidance or reduc-
  tion of state income or franchise taxes; 
•  The transaction changed the economic position of the taxpayer in a meaningful way apart from tax effects; and 

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                      2024 Wisconsin Form 3 Instructions                                                                Page 31 

•  The expenses were paid, accrued, or incurred using terms that reflect an arm’s length relationship. 

Factors that may indicate that the expense does not qualify for a deduction include the following:   
 
•  There was no actual transfer of funds from the taxpayer to the related entity, or the funds were substantially re-
  turned to the taxpayer, either directly or indirectly. 
•  If the transaction was entered on the advice of a tax advisor, the advisor’s fee was determined by reference to the 
  tax savings. 
•  The related entity does not regularly engage in similar transactions with unrelated parties on terms substantially 
  similar to those of the subject transaction. 
•  The transaction was not entered into at terms comparable to arm’s length as determined by Treas. Reg. sec. 
  1.482-1(b). 
•  There was no realistic expectation of profit from the transaction apart from the tax benefits. 
•  The transaction resulted in improper matching of income and expenses. 
•  An expense for the transaction was accrued under FIN 48. 
The statutes (sec. 71.80(23)(a)1. and 2., Wis. Stats.) provide some additional conditions under which a related 
entity expense may qualify for a deduction, subject to some important exceptions. Those conditions are: 
•  If the expense was paid to a related entity that is merely acting as a conduit between the taxpayer and an unrelated 
  entity, or 
•  If the related entity was subject to a tax measured by net income or receipts and the net income or receipts of the 
  transaction were included in its tax base. 
More Information on Related Entity Expenses. For more information on the deductibility of related entity expenses, 
see the Schedule RT instructions. Even if you weren’t required to include Schedule RT for the expenses, the instruc-
tions to Schedule RT provide helpful information regarding deductibility of related entity expenses. 
 
■ Line 10. Income from Related Entities Whose Expenses Were Disallowed – If the partnership has income from 
a related entity which paid, accrued, or incurred expenses to the partnership, and that related entity could not deduct 
those expenses according to the instructions for line 2, the partnership may subtract the corresponding income from 
its taxable income. 
In order to claim a subtraction on line 10, the partnership must obtain Schedule RT-1 from the related entity and 
include Schedule RT-1. See the Schedule RT-1 instructions for further details. 

■ Line 11. Section 179, Depreciation Difference, Amortization of Assets –   
 
Section 179 expenses: 
 
Enter the amount by which the federal section 179 expense exceeds the Wisconsin section 179 expense.  
 
For taxable years beginning on or after January 1, 2014, sections 179, 179A, 179B, 179C, 179D, and 179E of the 
Internal Revenue Code, related to expensing of depreciable business assets, apply for Wisconsin tax purposes. 
"Internal Revenue Code" means the federal Internal Revenue Code in effect for the year in which the property is 
placed in service. 
 
Depreciation/Amortization (not section 179 expense): 
 
Enter the amount by which the Wisconsin deduction for depreciation or amortization exceeds the federal deduction 
for depreciation or amortization. Include a schedule showing the computation details.  
 
These differences can happen because of IRC sections not adopted for Wisconsin purposes and electing a different 
depreciation method under the Internal Revenue Code in effect for Wisconsin purposes. 
 
For 2014 and beyond, bonus depreciation was reinstituted by the federal government, and an adjustment is required 

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                                      2024 Wisconsin Form 3 Instructions                                                                Page 32 

to account for the depreciation difference because Wisconsin has not adopted federal bonus depreciation provisions. 
For Wisconsin purposes, depreciation, depletion, and amortization is computed based on the Internal Revenue Code 
in effect on January 1, 2014, and bonus depreciation was not in effect on that date. 
 
■ Line 12. Amount by Which the Wisconsin Basis of Assets Disposed of Exceeds the Federal Basis – Sales 
of assets with different Wisconsin basis than federal basis will also require you to make adjustments in column c. For 
example, a partnership sold the following assets, which had been held more than one year: 
 
                    Selling Price        Wisconsin Basis      Federal Basis 
  Equipment         $1,000                      $1,500        $500 
  Machinery         $15,000                     $5,000        $17,500 
  Building          $200,000                $150,000          $120,000 
 
The gains (losses) realized on these transactions are – 
 
                    Wisconsin Gain (Loss)               Federal Gain (Loss) 
  Equipment                         ($500)                    $500 
  Machinery                        $10,000                    ($2,500) 
  Building                         $50,000                    $80,000 
  Total                            $59,500                    $78,000 
 
The partnership must recompute a federal Form 4797, substituting the Wisconsin depreciation allowed or allowable 
and Wisconsin basis of the assets for the federal amounts. 
 
For federal purposes, the $500 gain on the sale of the equipment is determined to be depreciation recapture, which 
is treated as ordinary gain and included in the partnership's ordinary income or loss on Form 3, Schedule 3K, line 1, 
column b. 
 
For Wisconsin purposes, $5,000 of the gain on the sale of the machinery is determined to be depreciation recapture, 
which is treated as ordinary gain. 
 
The partnership enters $4,500 ($5,000 Wisconsin ordinary gain minus $500 federal ordinary gain) on Schedule 3K, 
line 1, column c. The partnership makes the following entries on Schedule 3K, line 10: $77,500 in column b, $(23,000) 
in column c, and $54,500 in column d. 
 
■ Line 13. Federal Wage Credits – Enter wages that are not deductible in computing federal income because they 
are being used in computing certain federal wage credits. 
 
■ Line 14. Federal Research Credit Expenses – Enter research expenses that are not deductible in computing 
federal income because they are being used in computing the federal credit for increasing research activities. 
■ Line 15. Other Subtractions –    Enter any other subtractions that have not been accounted for in the preceding 
lines. List each item separately with a title describing the subtraction. 

•  Example: Investment in a Wisconsin qualified opportunity fund (QOF): 

  The partners of a partnership may qualify for a subtraction modification under sec.       71.05(25m),71.26(3)(vm) , 
  71.34(1k)(p), or 71.45(2)(a)21., Wis. Stats., if all of the following conditions are met: 

  o In a previous year, the partnership deferred paying tax on a capital gain by investing in a Wisconsin QOF. 
  o For the year in which the partnership invested in the Wisconsin QOF, the Wisconsin QOF properly filed 
    Wisconsin Form WQOF and provided a copy to the partnership. Exception: Form WQOF is not required for 
    taxable years beginning prior to January 1, 2020. 
  o The partnership held the investment in the Wisconsin QOF for at least 5 years. 
  o For the taxable year beginning in 2024, the partnership qualifies for the federal exclusion under sec. 1400Z-
    2(b)(2)(B)(iii), IRC, or sec. 1400Z-2(b)(2)(B)(iv), IRC. 

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                                     2024 Wisconsin Form 3 Instructions                                                                Page 33 

     If the above conditions are met, the partnership may use the following worksheet to calculate its subtraction. 
      
                                                Worksheet                                             Amount 
      Line 1 – If the investment in the WI QOF was held for at least 5 years but less than 7          
      years, enter 10%. If the investment in the WI QOF was held for 7 years or more, enter 
      15%. 
      Line 2 – Amount of deferred gains from the investment in a WI QOF.                              
      Line 3 – Multiply line 2 by line 1.                                                             
      Line 4 – Amount on line 3 that is allocated to partners who are either an estate or a trust.    
      Line 5 – Subtract line 4 from line 3.  This is the amount of the partnership's subtraction to   
      report on Form 3, Part III, Line 15. Use a description similar to "Wisconsin QOF subtrac-
      tion". 
      
     Caution:     For all partners who are either an estate or a trust, do not report any amount on their Schedules 
     3K-1, Part V, Line 15, for this subtraction. 
 
Pass-Through Entity Representative 

A pass-through entity representative is defined in sec. 71.80(26), Wis. Stats. A partnership must designate a pass-
through member or other person with substantial presence in the United States as the representative of the partner-
ship. Enter the pass-through entity representative's information on the appropriate lines of Form 3. 
 
If the pass-through entity representative is an individual, enter the individual's full name in the "Representative's 
Name" box and leave the "Contact's Name" box blank. 
 
If the pass-through entity representative is a firm or entity, enter the firm's or entity's name in the "Representative's 
Name" box and enter the name of the individual who is the primary contact of the firm or entity in the "Contact's 
Name" box. 
 
A pass-through entity representative has the following powers and duties: 
 
•  Act as the sole authority on behalf of the pass-through entity and its pass-through members with respect to a 
 determination under sec. 71.745, Wis. Stats. 
•  Provide the department sufficient information to identify each pass-through member and the capital, profit, and 
 loss interest of each pass-through member. 
•  Enter into extension agreements for statute of limitations. 
•  Receive notices. 
•  Notify all pass-through members of their share of corrections and adjustments made to pass-through items within 
 60 days after a determination under sec. 71.745, Wis. Stats., becomes final or after receipt of notice of approval 
 to pay tax on behalf of a partnership's partners as provided under sec. 71.76(2)(b), Wis. Stats. 
•  File an appeal of a notice of determination. 
•  Enter into settlement agreements and bind pass-through members to adjustments relating to pass-through items. 
Note: A pass-through entity representative has specific authorities with respect to audit determinations under sec. 
71.745, Wis. Stats., that are not otherwise authorized for a Power of Attorney. However, a Power of Attorney may be 
appointed as a pass-through entity representative under sec. 71.80(26), Wis. Stats., or a pass-through entity repre-
sentative may delegate the powers and duties in sec. 71.80(26)(b), Wis. Stats., to a Power of Attorney as provided 
under sec. 71.80(26)(c), Wis. Stats. 
 
For information on the different authorities between a pass-through entity representative and a Power of Attorney, 
see the department's common question number 19 at https://www.revenue.wi.gov/Pages/FAQS/ise-pte-audit.aspx. 
      
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                                      2024 Wisconsin Form 3 Instructions                                                                Page 34 

Note: A partnership may at any time provide a written statement to the department appointing or revoking a pass-
through entity representative. The statement must be signed by an authorized agent of the partnership and include 
the same information as requested on Form PT-R,   Pass-Through Entity Representative. The department recom-
mends using the Wisconsin Form PT-R to appoint or revoke a pass-through entity representative. 
 
The department will treat the most recently appointed pass-through entity representative as the representative under 
sec. 71.80(26), Wis. Stats. 
   
Additional Information, Assistance, and Forms 
 
Web Resources: 
The department's web page, available at revenue.wi.gov, has a number of resources to provide additional information 
and assistance, including: 
•  Related forms and their instructions  
• Common questions 
• Publications on specific tax topics 
•  The Wisconsin Tax Bulletin  
•  A home page specifically for combined reporting topics 
•  Links to the Wisconsin Statutes and Administrative Code 
 
Contact Information: 
If you cannot find the answer to your question on the department’s web page, contact the department using any of 
the following methods: 

E-mail your question to:  DORAuditPassThrough@wisconsin.gov 

•  Call (608) 266-2772 (Telephone help is also available using TTY equipment. Call the Wisconsin Telecommunica-
  tions Relay System at 711 or, if no answer, (800) 947-3529). 
•  Send a fax to (608) 267-0834 
•  Write to: Wisconsin Department of Revenue, Customer Service Bureau, Mail Stop 5-77, PO Box 8949, Madison, 
  WI  53708-8949 
•  Call or visit any Department of Revenue office 

Obtaining Forms: 
If you need forms or publications, you may:  
•  Download them from the department’s website at revenue.wi.gov  
•  Request them online at revenue.wi.gov  
•  Call (608) 266-1961 
•  Call or visit any Department of Revenue office 

Applicable Laws and Rules: 

This document provides statements or interpretations of the following laws and regulations enacted as of November 
29, 2024: chs. 71 and 77, Wis. Stats., and chs. Tax 1, 2, 3, and 11, Wis. Adm. Code. 

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