2023 Schedule M Instructions
                         Additions to and Subtractions from Income

 Purpose of Schedule M
Schedule M is used to report differences between federal and Wisconsin income. These differences are called modifications 
and may affect the amount you report on lines 15 and 28 of Form 1NPR.

Additions to Wisconsin income from Part I are reported on line 15, column B, of Form 1NPR, and subtractions from 
Wisconsin income from Part II are reported on line 28, column B, of Form 1NPR.

 Who Must File Schedule M
Your federal income may include items that aren’t taxable or deductible for Wisconsin, or it may not include items that are 
taxable or deductible for Wisconsin. You may have to add or subtract these items from your federal income to arrive at 
the correct Wisconsin income. Schedule M must be filed by persons for whom the addition and subtraction modifications 
described below apply.

 Line Instructions

 Part I – Additions to Income

 Line 1 – State and Municipal Interest
If you received any state, municipal, or other bond interest, enter the amount received from those bonds while a Wisconsin 
resident. This will generally be the amount shown on line 2a of your federal Form 1040 or 1040-SR. Note: If you were required 
for federal purposes to allocate expenses to this income, reduce the income by such expenses. For more information, see 
federal Publication 550, Investment Income and Expenses. 

Exception: Do not include interest income from: 

  (1)  Public housing authority or community development authority bonds issued by municipalities located in Wisconsin 
  (2)  Wisconsin Housing Finance Authority bonds 
  (3)  Wisconsin municipal redevelopment authority bonds 
  (4)  Wisconsin  Housing  and  Economic  Development  Authority  bonds  issued  on  or  after  December  11,  2003,  to  fund 
multifamily affordable housing projects or elderly housing projects 
  (5)  Wisconsin Housing and Economic Development Authority bonds issued before January 29, 1987, except business 
development revenue bonds, economic development revenue bonds, and CHAP housing revenue bonds 
  (6)  Public housing agency bonds issued before January 29, 1987, by agencies located outside Wisconsin where the 
interest therefrom qualifies for exemption from federal taxation for a reason other than or in addition to section 103 
of the IRC 
 (7)  Local exposition district bonds 
  (8)  Wisconsin professional baseball park district bonds 
  (9)  Bonds issued by the Government of Puerto Rico, Guam, the Virgin Islands, Northern Mariana Islands, or, for bonds 
issued after October 16, 2004, the Government of American Samoa 
(10)  Local cultural arts district bonds 
(11)  Wisconsin professional football stadium bonds 
(12)  Wisconsin Aerospace Authority bonds 
(13)  Bonds issued on or after October 27, 2007, by the Wisconsin Health and Education Facilities Authority to fund  
acquisition of information technology hardware or software 
(14)  Certain conduit revenue bonds  issued by a commission created  under sec. 66.0304, Wis. Stats. A listing of the  
conduit revenue bonds issued and the tax-exempt status is available on the department’s website at  
revenue.wi.gov/Pages/ISE/Conduit-Revenue-Bonds.aspx 
(15)  Wisconsin Housing and Economic Development Authority bonds or notes if the bonds or notes are issued to provide 
loans to a public affairs network under sec. 234.75, Wis. Stats. 
(16)  The Wisconsin Health and Educational Facilities Authority if the bonds or notes are issued for the benefit of a person  
who is eligible to receive the proceeds of bonds or notes from another entity for the same purpose for which the 
bonds or notes are issued under sec. 231.03(6), Wis. Stats., and the interest income received from the other bonds 
or notes is exempt from Wisconsin taxation 
(17)  A sponsoring municipality borrowing to assist a local exposition district created under subch. II of ch. 229, Wis.  
Stats. 
(18)  WHEDA bonds issued under sec. 234.65, Wis. Stats., to fund an economic development loan to finance construction,  
renovation, or development of property that would be exempt under sec. 70.11(36), Wis. Stats.
I-1053 (R. 12-23)

(19)  The Wisconsin Health and Educational Facilities Authority under sec. 231.03(6), Wis. Stats., if the bonds or notes are 
issued in an amount totaling $35,000,000 or less, and to the extent interest income received is not otherwise exempt 
from Wisconsin taxation

 Line 2 – Reserved for future use

 Line 3 – Nonqualified Distributions from Edvest and Tomorrow’s Scholar College Savings Account
If, while a Wisconsin resident, you received a distribution from an Edvest or Tomorrow’s Scholar college savings account 
and the entire distribution was not used for qualified higher educational expenses, you may have to include all or a portion 
of the distribution in income. If you rolled over an amount from an Edvest or Tomorrow’s Scholar college savings plan into 
another state’s plan, you may also have to include all or a portion of the amount rolled over in Wisconsin income. 

Amounts rolled over from a qualified tuition program to an ABLE account of the designated beneficiary, or a member of the 
family of the designated beneficiary, is not required to be included in Wisconsin income. The amount rolled over cannot 
exceed $17,000 for 2023. Any amount which exceeds $17,000 may have to be included in Wisconsin income.

If you received a distribution within 365 days of contributing an amount to an account, the amount previously subtracted 
may have to be included in income.

Complete Schedule CS, College Savings Accounts, to determine the amount you must include in income. Include Schedule 
CS with Form 1NPR.

 Line 4 – Nonqualified Distributions from ABLE Accounts
The owner (beneficiary) of a qualified ABLE account must include in income any amount withdrawn from a qualified ABLE 
account for any reason other than the payment of qualified disability expenses for the account beneficiary. Also, upon 
termination of an account, an addition to income is provided for any amount in the account that is returned to an account 
owner’s estate.

 Line 5 – Reserved for future use

 Line 6 – Income (Lump-Sum Distributions) Reported on Federal Form 4972
If you received a lump-sum distribution while a Wisconsin resident, and you used federal Form 4972 to figure your federal 
tax, you must add the amount of your lump-sum distribution on line 6. Include on line 6 the total of (1) the capital gain part 
of the lump-sum distribution from line 6 of federal Form 4972 and (2) the taxable amount from line 10 of federal Form 4972. 
You may reduce this amount by any federal estate tax on line 18 of federal Form 4972. Note:        No portion of a lump-sum 
distribution may be reported as a capital gain on Wisconsin Schedule WD.

 Line 7 – Excess Distribution from a Passive Foreign Investment Company
Fill in the amount of excess distribution from a passive foreign investment company which is allocable to Wisconsin and 
which has not been included in Wisconsin income in column B of Form 1NPR (see federal Form 8621 or 8621-A).

 Line 8 – Expenses Paid to or Incurred with Related Entities
Fill in the amount deducted or excluded from your Wisconsin income for interest, rental expenses, intangible expenses, and 
management fees paid, accrued, or incurred to a related entity (person or business entity). You must make this addition 
even though you may be eligible for a deduction for these expenses. If you are eligible for a deduction, you may then make 
a subtraction for the amount that qualifies on line 66. See the instructions for line 66. See sec. Tax 3.01(3), Wis. Adm. Code, 
for rules relating to this required addition.

 Line 9 – Expenses for Moving Business Outside Wisconsin or the United States
Fill in the amount of moving expenses deducted from your federal income to move a Wisconsin business operation to a 
location outside Wisconsin or the United States. Moving expenses means all of the following:

•  Vehicle rentals                •  Moving company expenses                         transportation
•  Storage rentals                           for packing, unpacking, and             •  Consulting fees and surveys

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•  Lease cancellation fees             •  Loss on the sale of property in             •  Expenses paid or incurred 
•  Utility fees                          Wisconsin                                    for professional services, 
•  Employee wages                      •  Reimbursement of an employee’s              including legal services
•  Architecture, design, and             expenses                                     •  The cost of meals, lodging, 
remodeling expenses                    •  Mileage deductions for vehicle              and fuel
•  Brokerage commissions or              use
fees                                   •  Moving company expenses 
•  Expenses paid or incurred to          for packing, unpacking, and 
sell property in Wisconsin               transportation

 Line 10 – Differences in Federal and Wisconsin Basis of Assets
Additions may be necessary if there is a difference between the federal basis and the Wisconsin basis of your property. 
Additions are necessary if: 

•  You acquired property in a taxable year beginning after December 31, 2013, which may be depreciated or amortized 
(such as buildings and leaseholds), and the federal basis was greater than the Wisconsin basis at the time you acquired 
the property. 
•  You sold (or otherwise disposed of) property which may not be depreciated or amortized (such as land, stocks, and 
bonds) in a taxable transaction, and your basis in the assets was greater for federal purposes than for Wisconsin. 
•  You sold (or otherwise disposed of) property where the federal basis is greater than the Wisconsin basis due to a 
previous gain on the sale of an asset being deferred because gain was invested in a “qualified new business venture” 
or a “qualified Wisconsin business.” See Schedule T, Transitional Adjustments, and Schedule QI, Sale of Investment in 
a Qualified Wisconsin Business. 

Compute the amount of any addition due to a difference in basis on Wisconsin Schedule T. Include the completed Schedule 
T with your return. 

Exceptions: Do not use line 10 for the following situations. 

•  If the difference in basis is due to the difference in the federal and Wisconsin definition of the Internal Revenue Code 
(for example, Wisconsin did not allow bonus depreciation for tax year 2022), use      Schedule I,  Adjustments to Convert 
2023 Federal Adjusted Gross Income and Itemized Deductions to the Amounts Allowable for Wisconsin, to adjust for the 
difference in depreciation for each year there is a difference in depreciation due to the difference in basis. 
•  If the difference in basis is due to using a different federal election for Wisconsin, (for example, electing to claim a 
different amount of sec. 179 expense), use Schedule   toIadjust for the difference in depreciation as a result of the 
difference in federal and Wisconsin basis, or submit a pro forma federal return based on the election chosen for 
Wisconsin.
•  If you sold your interest in a partnership and any increases or decreases were made to the federal basis of your partnership 
interest in taxable years prior to 1975, which resulted from partnership business or property located outside Wisconsin. 
(Prior to 1975, Wisconsin did not tax income from business or property located outside Wisconsin.) Compute any adjustment 
due to a difference in basis on Schedule T and net with other capital gains and losses on Wisconsin Schedule WD.
•  If the difference in basis has been entered on lines 6 and 15 of Schedule WD.

 Line 11 – Reserved for future use 

 Line 12 – Differences in Federal and Wisconsin Reporting of Marital Property (Community) Income 
If you are married and are filing a separate return for Wisconsin purposes or were divorced during 2023, you may have to 
report a different amount of income on your Form 1NPR than on your federal return. For more information, get Publication 
109, Tax Information for Married Persons Filing Separate Returns and Persons Divorced in 2023. See page 13 of the Form 
1NPR instructions for information on how to get this publication.

Note: For Wisconsin income tax purposes, the marital property law applies only while both you and your spouse are 
domiciled in Wisconsin. During any period that you and your spouse aren’t both domiciled in Wisconsin, you must report 
your income based on title and ownership under the common law property system.
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 Line 13 – Farmland Preservation Credit
Enter the amount of farmland preservation credit received in 2023 that isn’t already included as income on lines 1 through 
14 of Form 1NPR, column B.

 Lines 14 through 25 – Addition for Computed Credits
If you claimed any of the credits listed in (a) through (L) below, you must include the amount of your credit computed for 
2023 in Wisconsin income. The amount of your credit must be added to your income, even if you cannot take the full 
credit this year and must carry part of it forward or if the credit is refundable. Note: Do not include on line 14 through 25 
any credits passed through to you from a partnership, limited liability company, or tax-option (S) corporation. These were 
accounted for when you entered the Wisconsin source income (loss) on line 11, column B, of the Form 1NPR.

Include the following credits computed for 2023:
(a)  Development zones credits
(b)  Enterprise zone jobs credit
(c)  Reserved for future use
(d)  Economic development tax credit
(e)  Jobs tax credit
(f)  Capital investment credit
(g)  Community rehabilitation program credit
(h)  Research credits
(i)   Manufacturing and agriculture credit (see Exception below)
(j)  Business development credit
(k)  Electronics and information technology manufacturing zone credit
(L)  Employee college savings account contribution credit

Exception: The amount of manufacturing and agriculture credit computed for 2022 must be added to income on your 2023 
Wisconsin income tax return. This is the amount from line 16 of your 2022 Schedule MA-A or MA-M.

 Line 26 – Other Income
Nonresidents – Fill in any other income from line 9 of federal Schedule 1 (Form 1040) that you received from Wisconsin 
sources.

Part-year and full-year residents – Figure the amount of any other income from line 9 of federal Schedule 1 (Form 1040) 
you received while a Wisconsin resident. Add to that figure any other income you received from Wisconsin sources while 
a nonresident. When completing this line, do not include any portion of your federal net operating loss that may have been 
included on your federal return as a negative amount.

 Required Attachments for Additions Reported on Lines 29 through 32
Line 29 or 31: Submit a copy of the federal Schedule E and any related form (e.g., Form 8582) if you had to recompute the 
income or loss for Wisconsin purposes due to differences in the adopted Internal Revenue Code or different federal elections 
for federal and Wisconsin purposes (Schedule I modifications). The Schedule E and other forms should state “Revised for 
Wisconsin” at the top.
 
Line 30 or 32: Submit a copy of the related Schedule 2K-1, 3K-1, or 5K-1 and all supplemental schedules. 

If you filed electronically, attach these records as PDF documents to your electronically filed return. If you cannot attach and 
submit the PDF documents with your e-filed return, you can upload the PDF documents through the department’s website 
using Form W-RA at https://tap.revenue.wi.gov/WRA/. If you cannot create PDF documents, you can mail the attachments 
with Form W-RA to the address listed on the form.

 Line 29 – Tax-option (S) Corporation Adjustments 
Fill in any of the following amounts that apply to you:

(1)  If you were a shareholder of a tax-option (S) corporation and your loss (under the IRC adopted by Wisconsin) from 
 the entity is subject to a basis, at-risk, and/or passive loss limitation, or the section 179 expense is subject to a business 
 income limitation, enter the adjustment allocable to Wisconsin as a positive amount.
(2)  If  you  were  a  shareholder  of  a  federal  S  corporation  that  elected  not  to  be  treated  as  a  Wisconsin  tax-option  (S)  
 corporation, you must reverse all items of S corporation income, loss, or deduction included on your federal return  
 and then add your pro rata share of any distributions made by the corporation of earnings and profits which was  
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   received while you were a Wisconsin resident.          Caution: Do not reverse any item of S corporation income or loss 
   reported on federal Schedule D. These items were already  removed from Wisconsin income when you completed 
   Wisconsin Schedule WD.

See line 77 instructions for reporting subtractions.

 Required  Attachments: See  the instructions on page 4 under  the  section titled Required Attachments  for Additions 
Reported on Lines 29 through 32.

Enter the name and Federal Employer Identification Number (FEIN) of the tax-option (S) corporation with a brief description 
of the reason for the adjustment on the line(s) provided. 

If you have more than 2 entries, attach a schedule listing each additional entry. For example, if you have a $1,000 addition 
from tax-option (S) corporation A and a $5,000 addition from tax-option (S) corporation B, enter two separate additions on 
line 29 and enter the name and FEIN of corporation A and corporation B with an appropriate description of each adjustment 
on the lines provided.

If the adjustment for the entity is the result of 2 or more shareholder-level  adjustments, include  a dollar  value with each 
adjustment in the description. Example: Basis limitation of $3,000 and passive loss limit of $6,000.

For more information, get Publication 102, Wisconsin Tax Treatment of Tax-Option (S) Corporations and Their Shareholders. 
See page 13 of the Form 1NPR instructions for information on how to get this publication.

 Line 30 – Tax-option (S) Corporation Entity Level Tax Election Adjustments
If you were a shareholder of a tax-option (S) corporation that elected to be taxed at the entity level, net all items from the 
entity included in Wisconsin income and reported on column B of Form 1NPR. Add back any net loss on this line. If the 
result is a net profit, see the instructions for line 80. Note: If the tax-option (S) corporation made the election, the box will 
be checked on Schedule 5K-1, Part II, Item B, box 3. 

You must enter the name and FEIN for each tax-option (S) corporation for which you are removing items from your Wisconsin 
income. See example below. 

Caution: Do not reverse any item of tax-option (S) corporation gain or loss reported on federal Schedule D. These items 
have already been removed from Wisconsin income when you completed Wisconsin Schedule WD. See the Schedule WD 
instructions for more information. 

Caution: If you are a shareholder of a tax-option (S) corporation that did not make the entity level election but it directly or 
indirectly owned another pass-through entity (lower tier) that made the election, you need to make a similar adjustment to 
your income, except only for your share of that lower tier’s items. Box 4 of Part II, Item B will be checked on the Schedule 
5K-1 if a lower tier elected to pay the entity level tax. The tax-option (S) corporation is required to provide you a supplemental 
statement detailing your share of income, gain, loss, and deduction that have been taxed by a lower-tier entity.

Required Attachments:  See the instructions on page 4 under the section titled Required Attachments for Additions Reported 
on Lines 29 through 32 for more information.

For more information, get Publication 102, Wisconsin Tax Treatment of Tax-Option (S) Corporations and Their Shareholders. 
See page 13 of the Form 1NPR instructions for information on how to get this publication. 

Example: Shareholder A was a nonresident of Wisconsin for the entire year in 2023 and owns 50 percent of Tax-option 
(S) Corporation. Shareholder A’s Wisconsin sources of income for 2023 from the entity are $1,500 of interest, $10,000 
of federal net ordinary business income, and a $5,000 ordinary loss from the sale of business assets. Tax-option (S) 
Corporation makes an election under sec. 71.365(4m)(a), Wis. Stats., to pay tax at the entity level for 2023. 

Tax-option (S) Corporation has a $15,000 ordinary business loss for Wisconsin in 2023 due to the following differences: 

•  $20,000 of additional Wisconsin depreciation expense because of a different depreciable basis of an asset determined 
   under the IRC in effect for Wisconsin purposes 

•  $5,000 of income from related entities whose expenses were disallowed
 
Ignoring any other income and loss, Shareholder A must file the following forms: 
•  Schedule I to reduce federal adjusted gross income by $20,000 of additional depreciation

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•  Form 1NPR reporting the following income in column B: $1,500 of interest on line 2, ($5,000) of other losses from asset sales 
   on line 8, and ($15,000) of ordinary business loss from column (e) of Schedule 5K-1 on line 11

•  Schedule M, line 30, to report an $18,500 addition modification for Wisconsin income taxed at the entity level of the tax-
   option (S) corporation 

Computation of the $18,500 addition to Wisconsin income reported by the tax-option (S) corporation

                                         Description                                                Amount
Interest income sourced to Wisconsin                                                                $1,500
Other losses from asset sales sourced to Wisconsin                                                  ($5,000)
Net ordinary busines loss sourced to Wisconsin on column (e) of Schedule 5K-1                       ($15,000) 
Schedule M (line 30) - addition modification for Wisconsin loss reported by the  
tax-option (S) corporation (enter as a positive amount on Schedule M)                               ($18,500)

 Line 31 – Partnership, Limited Liability Company, Trust, or Estate Adjustments
If you were a member of a partnership or limited liability company (LLC) treated as a partnership, or you received income 
from an estate or trust, and your loss (under the IRC adopted by Wisconsin) from the entity is subject to a basis, at risk, 
and/or passive loss limitation, or the section 179 expense is subject to a business income limitation, enter the adjustment 
allocable to Wisconsin as a positive amount.

See line 81 instructions for reporting subtractions. 

Required Attachments: See the instructions on page 4 under the section titled Required Attachments for Additions Reported 
on Lines 29 through 32.

Enter the name and FEIN of the partnership with a brief description of the reason for the adjustment on the line(s) provided. 
If you have more than 2 entries, attach a schedule listing each additional entry. For example, if you have a $1,000 addition 
from partnership A and a $5,000 addition from partnership B, enter two separate additions on line 31 and enter the name 
and FEIN of partnership A and partnership B with an appropriate description of each adjustment on the lines provided. 

If an adjustment for the entity is the result of 2 or more owner/beneficiary-level adjustments, include a dollar value with each 
adjustment in the description. Example: Basis limitation of $3,000 and passive loss limit of $6,000.

 Line 32 – Partnership Entity Level Tax Election Adjustments
If you were a partner or member of a partnership or LLC treated as a partnership that elected to be taxed at the entity level, 
net all items from the entity included in Wisconsin income and reported on column B of Form 1NPR. Add back any net loss 
on this line. If the result is a net profit, see the instructions for line 82. Note: If the partnership made the election, the box 
will be checked on Schedule 3K-1, Part C, box 3. 

You must enter the name and FEIN for each partnership for which you are removing items from your Wisconsin income. 
See example below. 

Caution: Do not reverse any item of partnership gain or loss reported on federal Schedule D. These items have already 
been removed from Wisconsin income when you completed Wisconsin Schedule WD. See the             Schedule WD instructions 
for more information. 

Caution: If you are a partner of a partnership that did not make the entity level tax election but it directly or indirectly owned 
another pass-through entity (lower tier) that made the election, you need to make a similar adjustment to your income, 
except only for your share of that lower tier’s items. Box 4 of Part C on Schedule 3K-1 will be checked if a lower tier elected 
to pay the entity level tax. The partnership is required to provide you a supplemental statement detailing your share of 
income, gain, loss, and deduction that have been taxed by a lower-tier entity. Note: This also applies to beneficiaries of an 
estate or trust that directly or indirectly owned a tax-option (S) corporation or partnership that elected to pay the entity level 
tax. In this instance, Box D of Part II on the Schedule 2K-1 will be checked. Enter the name and FEIN of the estate or trust 
along with the amount of income/loss taxed at a lower tier on line 32 or 82, as appropriate.

Required Attachments: See the instructions on page 4 under the section titled Required Attachments for Additions Reported 
on Lines 29 through 32.

Example: Partner A was a  nonresident of Wisconsin for the entire year in 2023 and owns 50 percent of Partnership. 
Partner A’s Wisconsin sources of income for 2023 from the entity are $10,000 of federal net ordinary business income and 
$5,000 ordinary loss from the sale of business assets. Partnership makes an election under sec. 71.21(6)(a), Wis. Stats., 
to pay tax at the entity level for 2023. 
                                                     - 6 -

Partnership has a $15,000 ordinary business loss for Wisconsin for 2023 due to the following differences: 

•  $20,000 of additional Wisconsin depreciation expense because of a different depreciable basis of an asset determined 
  under the IRC in effect for Wisconsin purposes 

•  $5,000 of income from related entities whose expenses were disallowed 

Ignoring any other income and loss, Partner A must file the following forms: 

• Schedule I to reduce federal adjusted gross income by $20,000 of additional depreciation 

• Form 1NPR reporting the following income in column B: ($5,000) of other losses from asset sales on line 8, and ($15,000) 
  of ordinary business loss from column (e) of Schedule 3K-1 on line 11.

• Schedule M , line 32, to report a $20,000 addition modification for Wisconsin income taxed at the entity level of the 
  partnership

Computation of the $20,000 addition to Wisconsin income reported by the partnership.
                                     Description                                                          Amount
  Other losses from asset sales sourced to Wisconsin                                                      ($5,000)
  Net ordinary business loss sourced to Wisconsin on column (e) of Schedule 3K-1                  ($15,000)
  Schedule M (line 32) - addition modification for Wisconsin loss reported by the
    partnership (enter as a positive amount on Schedule M)                                        ($20,000)

 Line 33 – Other Additions to Income
Fill in any amount deducted in computing your federal adjusted gross income that is not allowed as a deduction for Wisconsin 
or any other addition to income. Enter a description of the addition(s) on the line(s) provided. If you have more than 2 entries, 
attach a schedule listing each additional entry. 

Example: You deducted a passive activity loss on your federal return for losses incurred when you were a resident of 
another state. The passive activity losses were not allocable to Wisconsin. The passive activity losses are not deductible 
for Wisconsin and must be included on line 33. Enter “Passive activity loss” on the line provided.

 Part II – Subtractions From Income

 Line 35 – Reserved for future use

 Line 36 – United States Government Interest
If you included U.S. government interest on line 2, column B, of Form 1NPR, subtract from your income the amount of 
interest on United States bonds and interest and dividends of certain United States government corporations. This income 
isn’t taxable for Wisconsin purposes.

A mutual fund may invest in U.S. government securities. If it does, a portion or all of its ordinary dividend may not be 
taxable by Wisconsin. If a mutual fund advised you that all or a portion of its ordinary dividend is from investments in U.S. 
government securities, include that portion on line 36.
Caution: Don’t subtract interest from Ginnie Mae (Government National Mortgage Association) securities and other similar 
securities which are “guaranteed” by the United States government. You must include interest from these securities in your 
Wisconsin income if you received the interest while a Wisconsin resident.

 Line 37 – Unemployment Compensation
Nonresidents – Don’t fill in any amount on line 37. Unemployment compensation received by a nonresident of Wisconsin 
isn’t taxable for Wisconsin purposes and no amount should be filled in on line 13, column B, of Form 1NPR. 

Part-year and full-year residents – Figure the taxable amount of unemployment compensation received while a Wisconsin 
resident and the amount eligible for the subtraction. Complete the following steps. 
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Step 1: Complete the worksheet below.
           Worksheet 1 – Unemployment Compensation Worksheet – Wisconsin Taxable Amount
  Check only one box. 
   A. Married filing a joint return – write $18,000 on line 3 below. 
   B.  Married not filing a joint return and lived with your spouse at any time during the year – write -0- on line 3 below. 
   C.  Married not filing a joint return and DID NOT live with your spouse at any time during the year – write $12,000 on
     line 3 below.
   D. Single (unmarried) – write $12,000 on line 3 below. 
  1. Fill in unemployment compensation from line 7 of federal Schedule 1 (Form 1040)  ..........   1.
  2. Fill in your federal adjusted gross income from line 31 of Form 1NPR  ....................   2.
  3. Fill in $18,000 if you checked box A; or  
         -0- if you checked box B; or 
         $12,000 if you checked box C or D ..........................   3.
  4. Fill in taxable social security benefits, if any, from line 14, column A, of 
    Form 1NPR   ................................................   4.
  5. Fill in taxable refunds, credits, or offsets, if any, from line 4, column A,  
    of Form 1NPR  ..............................................   5.
  6. Add lines 3, 4, and 5  ..........................................................  6.
  7. Subtract line 6 from line 2. If zero or less, fill in -0- here and on line 9 of this worksheet and do  
    not complete line 8. Otherwise, go on to line 8  ......................................  7.
  8. Fill in one-half of the amount on line 7  .............................................  8.
  9. Fill in the smaller amount of line 1 or line 8  .........................................  9.

Step 2: Use the following formula to figure the amount taxable by Wisconsin:
                                               UC* received while a
                                                Wisconsin resident                   UC taxable by Wisconsin
        UC from line 9 of worksheet        X   Total UC received from              = to line 2 of Worksheet 2
                                               line 1 of Worksheet                  
*Do not include any railroad unemployment insurance benefits here.

Step 3: Complete the worksheet below. 

         Worksheet 2 – Unemployment Compensation Worksheet – Wisconsin Sourced Amount
  1. Amount from line 13, column B, of Form 1NPR   ....................................  1.
  2. Unemployment compensation taxable by Wisconsin from Step 2 above  ................. 2.
  3. Subtract line 2 from line 1. Enter this amount on line 37. If zero or less, enter 0 (zero)   ...... 3.

 Line 38 – Reserved for future use
 
 Line 39 – Reserved for future use

 Line 40 – Medical Care Insurance
You may be able to subtract all or a portion of the cost of your medical care insurance. “Medical care insurance” means 
a medical care insurance policy that covers you, your spouse, and dependents and provides surgical, medical, hospital, 
major medical, or other health service coverage (including dental and vision insurance). If you are receiving social security 
benefits, the amount paid for medical care insurance includes the amount deducted from your monthly benefit for Medicare 
(for example, Parts B and D). It does not include premiums you pay for:

                                                     - 8 -

•  Long-term care insurance
•  Life insurance policies
•  Policies providing payment for loss of earnings
•  Policies that pay you a guaranteed amount each week for a stated number of weeks if you are hospitalized for sickness 
 or injury
•  The part of your car insurance premiums that provides medical insurance coverage for all persons injured in or by your 
 car
•  Medical care insurance if you elected to pay these premiums with tax-free distributions from a retirement plan made 
 directly to the insurance provider and these distributions would otherwise have been included in income

Caution:

•  Do not include medical care insurance premiums paid by an employer including amounts paid by you through payroll 
 deductions, unless the premiums are included as wages in Box 1 of your Form W-2. Premiums that are deducted pre-tax 
 are not included in Box 1 of your Form W-2.
•  Do not include medical care insurance premiums paid with distributions from a health savings account if the distribution 
 was not previously included in federal adjusted gross income. Distributions not previously included in federal adjusted 
 gross income include pre-tax contributions to a health savings account.
•  The amount of employer-provided medical care insurance that is identified on your Form W-2 in Box 12 with Code DD 
 cannot be included in the subtraction for medical care insurance.
•  If you participate in your employer’s fringe benefit cafeteria plan and agree to a voluntary salary reduction in return for a 
 medical care insurance benefit, you may not consider the amount of your salary reduction an amount you paid for medical 
 care insurance. Because you are an employee whose insurance premiums are paid with money that is not included in 
 your gross income (premiums are deducted pre-tax), you cannot subtract the premiums paid with that money. Such 
 programs may be known as, for example, flexible spending accounts, employee reimbursement accounts, etc. Some 
 employers may identify these amounts on your pay stubs as Internal Revenue Code sec. 125 or as a pre-tax deduction.

Complete Worksheet 1 below to figure your subtraction if you were (1) an employee or (2) a person who had no employer 
and were not self-employed.

When completing line 1 of the worksheet, if you purchased the insurance through an Exchange Marketplace, the amount 
you paid is the amount paid after your premium was reduced for any advance payment of the premium assistance credit.

                           Worksheet 1:  Medical Care Insurance – Others
  1.  Amount you paid for medical care insurance in 2023 ..................................   1.
  2.  Amount of premium tax credit from line 9 of your federal Schedule 3 (Form 1040)  ...........   2.
  3.  Subtract line 2 from line 1 .......................................................   3.
  4.  Amount of advance premium tax credit you were required to repay from line 2 of federal  
   Schedule 2 (Form 1040)  ........................................................   4.
  5.  Add lines 3 and 4   .............................................................   5.
  6.  Fill in the amount from Form 1NPR, line 16, column B, less the amount that will be on Form 1NPR,
   line 29, column B, without considering the subtraction for medical care insurance.  
   If zero or less, STOP, no subtraction is allowed ......................................   6.
  7.  Fill in the amount from line 31 of Form 1NPR. If zero or less, fill in 0 (zero) .................   7.
  8.  Divide line 6 by line 7.  Fill in decimal amount, but not more than 1.00 .....................   8.
  9.  Multiply line 5 by line 8  .........................................................   9.
  10.  Fill in the smaller of line 6 or 9. This is your subtraction for medical care
   insurance   ...................................................................  10.

Complete Worksheet 2 on the next page to figure your subtraction if you were self-employed. 

When completing line 1 of the worksheet, if you purchased the insurance through an Exchange Marketplace, the amount 
you paid is the amount paid after your premium was reduced for any advance payment of the premium assistance credit.

                                                  - 9 -

            Worksheet 2:  Medical Care Insurance – Self-Employed Persons
  1.  Amount you paid for medical care insurance in 2023 while you were self-employed ..........  1.
  2.  Amount of medical care insurance deducted on federal Schedule C or F for your employee  
   spouse   ...................................................................  2.
  3.  Self-employed health insurance deduction from line 17 of your federal Schedule 1 (Form 1040)*  3.
  4.  Amount of premium tax credit from line 9 of your federal Schedule 3 (Form 1040)  ...........  4.
  5.  Add lines 2 through 4...........................................................  5.
  6.  Subtract line 5 from line 1 .......................................................  6.
  7.  Amount of advance premium tax credit you were required to repay (line 2 of federal Schedule 2 
   (Form 1040))  .................................................................  7.
  8.  Add lines 6 and 7 ..............................................................  8.
  9.  Fill in the amount from Form 1NPR, line 16, column B, less the amount that will be on Form 1NPR,
   line 29, column B, without considering the subtraction for medical care insurance. If zero or
   less, STOP, no subtraction is allowed ..............................................  9.
  10.  Fill in the amount from line 31 of Form 1NPR. If zero or less, enter 0 (zero)  ................ 10.
 11.  Divide line 9 by line 10. Fill in decimal amount, but not more than 1.00  ....................  11.
  12.  Multiply line 8 by line 11  ........................................................ 12.
  13.  Fill in the smaller of line 9 or line 12. This is your subtraction for medical care insurance  ...... 13.
   *Do not include any amounts deducted for long-term care insurance.

 Line 41 – Long-Term Care Insurance
If you paid long-term care insurance costs during 2023, you may be able to subtract all or a portion of the cost of a long-term 
care insurance policy which covers you or your spouse.

“Long-term care insurance policy” means a disability insurance policy or certificate advertised, marketed, offered, or 
designed primarily to provide coverage for care that is provided in your home or in an institutional or community-based 
setting. The care must be convalescent or custodial care or care for a chronic condition or terminal illness.

“Long-term care insurance policy” does not include a Medicare supplement policy or Medicare replacement policy or a 
continuing care contract. “Continuing care contract” means a contract which provides nursing services, medical services, 
or personal care services, in addition to food, shelter, and laundry services, for the duration of a person’s life or for a term 
in excess of one year, conditioned upon any of the following payments:
•  An entrance fee in excess of $10,000
•  Providing for the transfer of at least $10,000 (if the amount is expressed in dollars) or 50% of the person’s estate (if the 
 amount is expressed as a percentage of the person’s estate) to the service provider upon the person’s death

Do not include long-term care insurance if you elected to pay those premiums with tax-free distributions from a retirement 
plan made directly to the insurance provider and these distributions would otherwise have been included in income.

Do not include long-term care insurance premiums paid with distributions from a health savings account if the distribution 
was not previously included in federal adjusted gross income. Distributions not previously included in federal adjusted gross 
income include pre-tax contributions to a health savings account.

If you paid long-term care insurance costs during 2023 for a policy which covers you or your spouse, complete the following  
worksheet to determine the amount of your subtraction.

                                                      - 10 -

                                    Worksheet – Long-Term Care Insurance

  1.  Amount paid for long-term care insurance in 2023   ..................................    1.
 2.  Portion of long-term care insurance cost included as a self-employed health insurance  
    deduction on line 17 of federal Schedule 1 (Form 1040)  ..............................    2.
 3.  Portion of long-term care insurance cost deducted on federal Schedule C or F for your  
    employee spouse  ............................................................    3.
 4.  Add lines 2 and 3  ............................................................    4.
 5.  Subtract line 4 from line 1   .....................................................    5.
 6.  Fill in the amount from Form 1NPR, line 16, column B, less the amount that will be on
    Form 1NPR, line 29, column B, without considering the subtraction for long-term care
    insurance. If zero or less, STOP, no subtraction is allowed  ............................   6.
  7.  Fill in the amount from line 31 of Form 1NPR. If zero or less, enter 0 (zero)  ...............   7.
 8.  Divide line 6 by line 7. Fill in decimal amount, but not more than 1.00  ....................   8.
 9.  Mulitply line 5 by line 8  ........................................................   9.
  10.  Fill in the smaller of line 6 or 9. This is your subtraction for long-term care insurance  ........  10.

 Line 42 – Tuition and Fee Expenses
You may be able to claim a subtraction for up to $6,974 per student of the amount you paid during 2023 for tuition and 
mandatory student fees for you, your spouse (if married filing a joint return), and your children whom you claim as dependents 
on your federal income tax return.

The tuition and mandatory student fees must have been paid during 2023 to attend any of the following:
– Classes in Wisconsin at a school which qualifies as a university, college, or technical college. A “university, college, 
 or technical college” is any school which has a curriculum leading to a diploma, degree, or occupational or vocational 
 objective (for a list of Wisconsin private colleges see wisconsinsprivatecolleges.org/colleges or technical colleges see 
 wtcsystem.edu/colleges).
– Classes in Wisconsin at other post-secondary (post-high school) schools that have been approved through the Educational 
 Approval Program (for a list see dspseap.wi.gov/resources/schoolsprograms.asp).
– Classes in Minnesota at a public vocational school or public institution of higher education in Minnesota    under the 
 Minnesota–Wisconsin tuition reciprocity agreement.
– Classes outside Wisconsin provided the tuition is paid to a university, college, or technical college located in Wisconsin.

The subtraction applies to:
•  Tuition and mandatory student fees paid to a school that fits into one of the four categories listed above regardless  
 of the type of course taken. Example: Tuition paid for craft or recreational courses at a technical college qualifies for  
 the subtraction.
•  Tuition and mandatory student fees paid for correspondence courses or courses received via the internet or other  
 electronic  transmission  as  long  as  the  courses  are  taken  in  Wisconsin,  and  are  presented  by  a  school  (located  
 in or outside Wisconsin) which qualifies as a university, college, or technical college, or a school approved through  
 the Educational Approval Program.
•  Tuition and mandatory student fees paid from loans, gifts, inheritances, and personal savings.
•  The cost of books required to be paid to the school in order to attend the class. In this case, the books are considered  
 a mandatory student fee.

The subtraction does not apply to:
•  Tuition or fees paid to pre-schools, elementary, or secondary schools, such as grade schools and high schools.
•  Tuition and fees paid to a school which does not fit into any of the four categories listed above. Example:  The subtraction 
 does not apply to a fee paid to a retail craft store to attend a session on flower arranging.
•  Amounts paid as separate charges for other items such as room and board, athletic tickets, or other costs which are not 
 tuition and mandatory student fees.
•  Tuition and fees paid with certain tax-free funds. Example: You cannot claim a subtraction for tuition paid with tax-free 
 scholarships or Pell grants or for amounts paid or reimbursed to you by your employer.
                                                         - 11 -

•  Tuition and fees if the source of the payments is an amount withdrawn from a Wisconsin state-sponsored college savings 
 program or college tuition and expenses program (Edvest or Tomorrow’s Scholar). This limitation applies only if the owner 
 of the account or other person who contributed to the account (for example, grandparent, aunt, uncle, or other person) 
 previously claimed a subtraction for contributions to the Edvest or Tomorrow’s Scholar program.

The subtraction is limited if your federal adjusted gross income exceeds certain amounts. Your federal adjusted gross 
income is the amount from line 31 of Form 1NPR.

If your filing status is:

Single or Head of Household 
•  If your federal adjusted gross income is $65,370 or less, complete lines 7 through 12 of the worksheet below to figure the 
 amount of your subtraction for tuition and mandatory student fees. Enter the amount of tuition and fees paid during 2023 
 on line 7, but not more than 6,974 per student.
•  If your federal adjusted gross income is more than $65,370 but less than $78,440, complete the worksheet below to figure 
 the amount of your subtraction.
•  If your federal adjusted gross income is $78,440 or more, you may not subtract any amount for tuition and fee expenses.

Married Filing Joint Return
•  If your federal adjusted gross income is $104,590 or less, complete lines 7 through 12 of  the worksheet below to figure 
 the amount of your subtraction for tuition and mandatory student fees. Enter the amount of tuition and fees paid during 
 2023 on line 7, but not more than 6,974 per student.
•  If your federal adjusted gross income is more than $104,590 but less than $130,730, complete the worksheet below to 
 figure the amount of your subtraction.
•  If your federal adjusted gross income is $130,730 or more, you may not subtract any amount for tuition and fee expenses.

Married Filing Separate Return
•  If your federal adjusted gross income is $52,300 or less, complete complete lines 7 through 12 of the worksheet below 
 to figure the amount of your subtraction for tuition and mandatory student fees. Enter the amount of tuition and fees paid 
 during 2023 on line 7, but not more than $6,974 per student. 
•  If your federal adjusted gross income is more than $52,300 but less than $65,370, complete the worksheet below to figure 
 the amount of your subtraction.
•  If your federal adjusted gross income is $65,370 or more, you may not subtract any amount for tuition and fee expenses.

Complete the worksheet below as required for your filing status.

                                       Tuition Expense Worksheet
   Caution: Complete this worksheet as specified above for your filing status and income.
  1.  Amount paid for tuition and mandatory student fees in 2023. Do not fill in more than $6,974 per 
   student  ...................................................................  1.
  2.  Fill in your federal adjusted gross income (line 31 of Form 1NPR) ......................  2.
  3.  Fill in $65,370 ($104,590 if married filing joint return or $52,300 if married filing separate return)  3.
  4.  Subtract line 3 from line 2 .....................................................  4.
  5.  Divide the amount on line 4 by 13,070 (26,140 if married filing joint return). Fill in decimal  
   amount  ...................................................................  5.
  6.  Multiply line 1 by the decimal amount on line 5 .....................................  6.
  7.  Subtract line 6 from line 1 ......................................................  7.
  8.  Fill in the amount from Form 1NPR, line 16, column B, less the amount that will be on the 
   Form 1NPR, line 29, column B, without considering the subtraction for tuition and fees. If
   zero or less, STOP, no subtraction is allowed   .....................................  8.
  9.  Fill in the amount from line 31 of Form 1NPR  ......................................  9.
10.  Divide line 8 by line 9. Fill in decimal amount, but not more than 1.00...................  10.
11.  Multiply line 7 by line 10   .....................................................  11.
12.  Fill in the smaller of line 8 or 11. This is your subtraction for tuition and fees  .............  12.

                                                     - 12 -

 Line 43 – Private School Tuition 

A subtraction may be claimed for tuition paid in the taxable year to send your dependent child to a private school. The 
maximum subtraction is $4,000 for an elementary pupil and $10,000 for a secondary pupil. See Schedule PS,     Private 
School Tuition, for further information. A copy of Schedule PS must be included with your Wisconsin income tax return. 

Do not take a subtraction for amounts paid for private school tuition which were withdrawn from an Edvest or Tomorrow’s 
Scholar college savings account.

 Line 44 – Contributions to an Edvest or Tomorrow’s Scholar College Savings Account
You may be able to subtract the amount you contributed to a Wisconsin state-sponsored college savings account (Edvest 
or  Tomorrow’s Scholar)  if  you are the owner  of the account  or were  authorized by the  owner  of the  account to make 
contributions to the account. You may also claim a subtraction if you rolled over an amount from another state’s qualified 
plan into a Wisconsin account.

Complete Schedule CS, College Savings Accounts, to determine the amount of your subtraction. Include Schedule CS with 
your Form 1NPR.

 Line 45 – Distributions of Earnings from Wisconsin State-Sponsored College Tuition Programs

If you included earnings from a qualified college tuition program in your federal adjusted gross income, you may subtract 
that amount if the earnings were from a Wisconsin Edvest tuition unit account and you received a refund because the 
beneficiary completed the program in which they were enrolled and had not used all of the tuition units purchased, or the 
beneficiary was awarded a scholarship, tuition waiver, or similar subsidy that could not be converted to cash.

 Line 46 – Military and Uniformed Services Retirement Benefits
You may subtract retirement payments received from: 

(1)  The U.S. military retirement system (including payments from the Retired Serviceman’s Family Protection Plan or the  
  Survivor Benefit Plan). These retirement benefits are paid from the Defense Finance and Accounting Service.
(2)  The U.S. government that relate to service with the Coast Guard, the commissioned corps of the National Oceanic and  
  Atmospheric Administration, or the commissioned corps of the Public Health Service. 

Your subtraction cannot be more than the amount of such retirement payments that you included on line 10, 
column B, of Form 1NPR.

 Line 47 – Local and State Retirement Benefits
You may subtract any payments received from the retirement systems listed below provided you meet one of the following 
requirements: 

(1)  You were retired from the system before January 1, 1964 
(2)  You were a member of the system as of December 31, 1963, retiring at a later date and payments you receive are from  
  an account established before 1964 
(3)  You are receiving payments from the system as the beneficiary of an individual who met either condition 1 or 2 

Your subtraction cannot be more than the amount of such payments that you included on line 10, column B, of 
Form 1NPR. The specific retirement systems are: 

Milwaukee City Employees, Milwaukee City Police Officers, Milwaukee Fire Fighters, Milwaukee Public School Teachers, 
Milwaukee County Employees, Milwaukee Sheriff, and Wisconsin State Teachers retirement systems. 

Note: Do not subtract any of the following: 
•  Payments received as a result of voluntary tax-sheltered annuity deposits in any of the retirement systems listed above. 
•  Payments received from one of the retirement systems listed above if you first became a member after December 31, 
1963. This applies even though pre-1964 military service may have been counted as creditable service in computing your 
retirement benefit.

Caution: Your retirement benefits may be subtracted only if they are based on qualified membership in one of the retirement 
systems listed above. Qualified membership is membership that began before January 1, 1964, as explained above. Any 
portion of your retirement benefit that is based on membership in other retirement systems (or based on employment that 
began after December 31, 1963) is taxable and may not be subtracted. 
                                                    - 13 -

Example 1: You were a member of the Wisconsin State Teachers Retirement System as of December 31, 1963. You 
left teaching after 1963 and withdrew the allowable amount from your retirement account which closed the account. You 
later returned to teaching, and a new retirement account was then established for you. Retirement benefits from this new 
account (established after 1963) do not qualify for the subtraction.

Example 2: You were employed as a teacher from 1960-65. During that time you were a member of the Wisconsin State 
Teachers Retirement System. From 1966 until retirement, you were employed by a state agency (not as a teacher). You 
were then a member of the Wisconsin Retirement System. You receive an annuity from the Department of Employee Trust 
Funds, and the annuity is based on employment in both retirement systems. Only the portion of the annuity that is due to the 
Wisconsin State Teachers Retirement System may be subtracted. You may use the following formula to figure the exempt 
amount that may be subtracted:

    Years of creditable service in
           an exempt plan                            Annuity included               Portion of annuity which
     Total years of creditable         X on lineof Form10, column1NPR B,          = may be subtracted
           service

  You may have received separate Forms 1099-R for the taxable and exempt portions of your annuity. In this case, you  
may use the Form 1099-R information instead of the above formula.

 Line 48 – Federal Retirement Benefits
You may subtract payments received from a federal retirement system provided you meet one of the following requirements: 

(1)  You were retired from the system before January 1, 1964 
(2)  You were a member of the system as of December 31, 1963, retiring at a later date and payments you receive are from  
    an account established before 1964 
(3)  You are receiving payments from the system as the beneficiary of an individual who met either condition 1 or 2 

Your subtraction cannot be more than the amount of such payments that you included on line 10, column B, of 
Form 1NPR.

See “Local and State Retirement Benefits” on page 13 for further information. The limitations and examples that apply 
to local and state retirement benefits also apply to federal retirement benefits. 

A “federal retirement system” is a United States government civilian employee retirement system. Examples of such re-
tirement systems include the Civil Service Retirement System and the Federal Employees’ Retirement System. These 
retirement benefits are paid from the U.S. Office of Personnel Management. Payments from the federal Thrift Savings Plan 
do not qualify for the subtraction.

 Line 49 – Railroad Retirement Benefits, Railroad Unemployment Insurance, and Sickness Benefits
Wisconsin does not tax amounts received from the U.S. Railroad Retirement Board. You may subtract railroad retirement 
benefits included on line 10, column B, of Form 1NPR.

 Line 50 – Retirement Income Subtraction
You may subtract up to $5,000 of certain retirement income if:

•  You (or your spouse if married filing a joint return) were 65 years of age or older on December 31, 2023, and
•  Your federal adjusted gross income (line 11 of federal Form 1040 or 1040-SR) is less than $15,000 ($30,000 if married 
  filing a joint return). If married filing a separate return, the sum of both spouses’ federal adjusted gross income must be 
  less than $30,000.

If you meet these qualifications, complete the Retirement Income Subtraction Worksheet on the following page to determine 
the amount of your subtraction. Your subtraction is the amount from line 4 of the worksheet. If married filing a joint return, 
your subtraction is the total of the amounts in Col. (A) and Col. (B) of line 4 of the worksheet. Enter this amount on line 50.

Retirement Income Subtraction Worksheet - Line 2 Instructions: Enter qualified pension and annuity income that is taxable 
for federal purposes from line 10, column B of Form 1NPR less the amount from Schedule M lines 46 (military and 
uniformed services retirement benefits), 47 (local and state retirements benefits), 48 (federal retirement benefits), and 49 
(railroad retirement benefits).
                                                     - 14 -

                                 Retirement Income Subtraction Worksheet
                                                 (Keep for your records)
  If married filing a joint return, fill in each spouse’s information separately.        (A)               (B)
                                                                                         Yourself Your Spouse
  1.  Taxable IRA distributions from line 9, column B, of Form 1NPR  .......  1.
  2.  Pension and annuity income from qualified plans without considering
      this subtraction. See instructions on previous page  ................  2.
  3.  Add lines 1 and 2   ..........................................  3.
  4.  Complete line 4 as follows. This is your subtraction for retirement income.
     •  If you were 65 years of age or older on December 31, 2023, fill in on line 4,
       Col. (A), the smaller of line 3, Col. (A), or $5,000. Fill in 0 (zero) if you were
       not age 65 or older.
     •  If married filing a joint return and your spouse was 65 years of age or older
       on December 31, 2023, fill in on line 4, Col. (B), the smaller of line 3, Col.
       (B), or $5,000. Fill in 0 (zero) if your spouse was not age 65 or older  ....  4. 

 Line 51 – Reserve or National Guard Members
If you were a member of the Reserves or National Guard and served on active duty, you may subtract military pay that is 
included on line 1, column B, of Form 1NPR and that was:

(1)  Received from the federal government, 
(2)  Received after being called into active federal service or into special state service authorized by the federal Department  
    of Defense, and 
(3)  Paid to you for a period of time during which you were on active duty and called into active federal service or special  
    state service, even if the pay was received after the active duty period ended. 

Caution: This subtraction only applies to members of the Reserves or National Guard who are called into active federal 
service under 10 USC 12302(a), 10 USC 12304, or 10 USC 12304b or into special state service under 32 USC 502(f). It 
does not apply to pay that members of the Reserves and National Guard receive for weekend and two-week annual training 
or to a person serving on active or full-time duty in the Active Guard Reserve (AGR) program. However, persons in the AGR 
program may qualify for a subtraction under line 52 for U.S. Armed Forces Active Duty Pay. See the line 52 subtraction 
below for additional information.

  You are not required to send in a copy of your military orders and leave and earnings statements; however, including a copy 
of these with your Wisconsin return may speed up the processing of your return.

 Line 52 – U.S. Armed Forces Active Duty Pay
If  you  were  a  member  of  the  U.S.  Armed  Forces  on  active  duty,  you  may  subtract  any  amount  of  basic,  special,  and 
incentive pay received from the federal government under 37 USC chapters 3 and 5 for active duty that is included in line 
1, column B, of Form 1NPR. A member of the U.S. Armed Forces includes all regular and reserve components subject 
to the following jurisdictions, including the Coast Guard and commissioned officers and personnel below the grade of 
commissioned officers in these forces: 
•  Secretary of Defense 
•  Secretary of the Army 
•  Secretary of the Navy 
•  Secretary of the Air Force 

Caution: Do not include the following amounts in your subtraction on line 52:
•  Basic pay for inactive duty training. 
•  Basic housing allowance, or any other nontaxable income reported on your leave and earnings statements. 
•  Any amount subtracted under line 51 as a member of the Reserves or National Guard.

  You are not required to send in a copy of your military orders and leave and earnings statements; however, including copies 
with your Wisconsin return, and a worksheet showing how you calculated the amount of your subtraction, may speed up 
the processing of your return.

For additional information, see Publication 128, Wisconsin Tax Information for Military Personnel and Veterans.
                                                        - 15 -

 Line 53 – Combat Zone Related Death
If you are filing a return for an individual who was on active duty in the U.S. Armed Forces and who died in 2023 while on 
active duty and the death occurred while they were serving in a combat zone or as a result of wounds, disease, or injury 
incurred while serving in the combat zone, you may subtract all income received by the individual during the year of death.
Attach the certification made by the Department of Defense, DD Form 1300, Report of Casualty, to the return.

Note: For persons who died in 2023 as a result of service in a combat zone, the income subtraction also applies for 2022 
if the service member did not previously file a 2022 income tax return.

Caution: “Combat zone” does not include the Sinai Peninsula of Egypt.

 Line 54 – Adoption Expenses
If you were a full-year resident of Wisconsin for 2023 and you adopted a child for whom a final order of adoption was 
entered by a court of any state, or upon registration of a foreign adoption, during 2023, you may subtract up to $5,000 of 
the amount you paid for adoption fees, court costs, and legal fees relating to the adoption. You may include amounts paid 
during 2021, 2022, and 2023. Don’t count amounts reimbursed under any adoption assistance program. If you adopt more 
than one child during the year, you may deduct up to $5,000 of adoption expenses for each child.

 Line 55 – Contributions to ABLE Accounts
A subtraction may be claimed for the amount you contributed to a qualified ABLE (Achieving a Better Life Experience) 
account during the year. The owner (beneficiary) of an ABLE account must be a disabled person. Distributions from the 
account must be used to pay the qualified disability expenses of the disabled person. The total maximum subtraction that 
may be claimed by all contributors to the account for 2023 is $17,000.

Caution: An ABLE account must refund any contributions it receives after reaching the maximum contribution limits for the 
taxable year. Such refunds must be made by the due date (including extensions) for the federal income tax return of the 
designated beneficiary for the taxable year in which the excess contribution was made. Your subtraction is limited to the 
amount contributed during 2023 less any amounts later refunded to you, excluding any portion of the refund that is considered 
earnings.

Note:  The subtraction does not apply to rollovers or transfers from another account.

An additional amount of contributions is allowed as a subtraction by a designated beneficiary equal to the lesser of the 
following:

1.  The designated beneficiary’s compensation (included in gross income for the taxable year)
2.  The federal poverty line for a one-person household for the preceding calendar year

This increase is only allowed if the designated beneficiary is an employee and no contributions have been made to a 
defined contribution plan, annuity contract, or deferred compensation plan. Use the worksheet below to figure your total 
subtraction.

            Worksheet for Contributions by a Designated Beneficiary to an ABLE Account
  1. Amount contributed to the ABLE account during 2023 ................................   1.               .00
  2  If line 1 is less than $17,000, do not complete the rest of this worksheet.  
    Enter the amount from line 1 on line 55 of Schedule M. Otherwise, continue to step 3  .......   2.      17,000.00
  3. Subtract line 2 from line 1 .....................................  3.                   .00
  4. The designated beneficiary’s compensation  ......................   4.                  .00
  5. Applicable federal poverty line for a one person household ...........   5.       13,590.00
  6. Enter the smaller of line 3, 4, or 5   ...............................................  6.             .00
  7. Add line 2 and line 6. This is your subtraction for contributions to an ABLE account .........  7.     .00

 Line 56 – Disability Income Exclusion
If you retired on permanent and total disability and have included your disability income on your federal return, you may be 
able to subtract up to $5,200 of your disability income. 

                                                         - 16 -

You must meet all these tests: 
1.  You didn’t reach mandatory retirement age before January 1, 2023 
2.  You were under age 65 on December 31, 2023 
3.  You were permanently or totally disabled on one of the following dates: 
 a. The date you retired 
 b. January 1, 1976, or January 1, 1977, if you retired before January 1, 1977, on disability or under circumstances
    which entitled you to retire on disability 
4. If you were married at the end of 2023, you must file a joint return with your spouse 
5. You were a Wisconsin resident when you received the disability income 
6.  You did not in any year prior to 1984 choose to treat your disability income as a pension instead of taking the exclusion 
7.  Your federal adjusted gross income is less than $20,200 ($25,400 if married and both spouses are eligible)

Figure your exclusion on Wisconsin Schedule 2440W, Disability Income Exclusion. See page 13 of the Form 1NPR instructions 
for information on how to get Schedule 2440W. 

Full-year residents – Subtract from the disability income included on line 1, column B, of Form 1NPR the exclusion from 
line 6 of Schedule 2440W. 

Part-year residents – Subtract the exclusion from line 8 of Schedule 2440W from the portion of your disability income which 
is otherwise taxable to Wisconsin and included on line 1, column B, of Form 1NPR. Include your completed Schedule 
2440W with your Form 1NPR.

 Line 57 – Wisconsin Net Operating Loss Deduction
Enter the amount of your allowable Wisconsin net operating loss deduction. Include Schedules NOL1, NOL2, and/or NOL3, as 
applicable. See the instructions for these schedules and Publication 120, Net Operating Losses for Individuals, Estates, and 
Trusts, for details on computing the net operating loss and the allowable deduction. See page 13 of the Form 1NPR instructions 
for information on how to get Publication 120. Note: A net operating loss carryforward may not be used unless the incurred loss 
was computed on a return that was filed within 4 years of the unextended due date for that return.

 Line 58 – Farm Loss Carryover

If you were not actively engaged in farming and were subject to farm loss limitations on your 2007-2013 Wisconsin income 
tax returns, you may be able to claim a subtraction for all or a portion of the farm loss disallowed in those years. Farm losses 
disallowed as a deduction may be carried forward for 15 years to the extent that the farm losses are not offset against farm 
income of any year between the loss year and the year for which the carryover is claimed. The amount of carryover that 
can be subtracted is the lesser of (1) the farm loss carryover or (2) the net profits or net gains from the sale or exchange of 
capital or business assets in the current taxable year from the same farming business or portion of that business to which 
the limits on deductible farm losses applied in the loss year. 

 Line 59 – Native Americans
Certain income (for example, wages) earned by a Native American who both lives and works on their tribal reservation is 
not subject to Wisconsin income tax and may be subtracted. See Publication 405,       Wisconsin Taxation Related to Native 
Americans, for more information.

 Line 60 – Sale of Business Assets or Assets Used in Farming to a Related Person
You may subtract the taxable portion of gain you realize from the sale or disposition to a related person of business assets 
or assets used in farming if the following conditions apply:
– The related person is your child, grandchild, great-grandchild, parent, brother or sister, nephew or niece, grandparent, 
 great-grandparent, aunt, or uncle. The person may be related to you by blood, marriage, or adoption.
– The asset was held by you for more than 12 months.
– The gain is treated as capital gain for federal tax purposes. Amounts treated as ordinary income do not qualify.
Gain on the sale or disposition of shares in a corporation or trust qualifies only if:
– The number of shareholders or beneficiaries does not exceed 15. Lineal ancestors and descendants and aunts, uncles, 
 and 1st cousins thereof count collectively as one shareholder or beneficiary. This collective authorization may not be 
 used for more than one family in a single corporation or trust.
– The corporation does not have more than two classes of shares.
– All shareholders or beneficiaries, other than any estate, are natural persons.
– The corporation or trust is engaged in farming
                                                            - 17 -

“Farming” means the cultivation of land or the raising or harvesting of any agricultural or horticultural commodity including 
the raising, shearing, feeding, caring for, training, and management of animals. Trees (other than trees bearing fruit or nuts) 
are not treated as an agricultural or horticultural commodity. Note: Trees may qualify as a business asset, see the definition 
for business assets.

“Business assets” are assets used in an activity carried on for a livelihood or in good faith to make a profit. The facts and 
circumstances of each case determine whether or not an activity is a business. Regularity of activities and transactions and 
the production of income are important elements. You do not need to actually make a profit to be in a business as long as 
you have a profit motive. You do need, however, to make ongoing efforts to further the interests of your business.

Business assets include assets used in the performance of services by an individual as an employee and assets used in 
the conduct of a trade or business by an individual who is self-employed.

Business assets do not include investment and rental property (for example, stocks, bonds, and residential rental property) 
unless you are subject to federal self-employment tax on the earnings from the activity.  Note: Rental property which is a 
farm or farm equipment may qualify as an asset “used in farming.”

Computing the subtraction You must first complete Wisconsin Schedule WD. The amount of gain that may be subtracted 
is determined after netting all capital gains and losses on Schedule WD. Complete the worksheet below to figure the 
amount of your subtraction.

                              Worksheet for Gain on Sale of Assets to Related Person
  1.  Amount from line 19 of Schedule WD.  If 0 (zero) do not complete the rest of this worksheet.  
   You do not qualify for the subtraction   .............................................   1.
  2.  Long-term capital gain on the sale of assets to a related person  ........................  2.
  3.  Total long-term capital gain included on line 17 of Schedule WD  ........................  3.
  4.  Divide line 2 by line 3.  Carry decimal to four places  .................................  4.
  5.  Multiply line 1 by line 4  .........................................................   5.
  6.  If the amount on line 2 is gain from the sale of an asset used in farming, multiply line 5 by .40  
   (40%) and fill in result.* If the amount of line 2 is gain from the sale of a business asset or gain  
   from the sale of qualified shares in a corporation, multiply line 5 by .70 (70%) and fill in result.  
   This is your subtraction for gain on the sale of assets to a related person. Enter this amount on 
   line 60   .....................................................................   6.

*  A sale to a relative of qualified shares in a corporation that is engaged in farming does not qualify for the additional 
30% exclusion for the sale of assets used in farming on Wisconsin Schedule WD. Thus the amount that may be subtracted 
as gain on the sale of qualifying shares of stock in a corporation is 70% of the gain.

 Line 61 – Recoveries of Federal Itemized Deductions
Enter the amount included in lines 1 through 14 of Form 1NPR, column B, which is a recovery of a federal itemized 
deduction from a prior year for which you didn’t receive a Wisconsin tax benefit.

Example: You deducted a casualty loss of $2,000 as an itemized deduction on your 2022 federal income tax return. You 
couldn’t claim the casualty loss for the itemized deduction credit on your 2022 Wisconsin return. In 2023, you received a 
$1,000 reimbursement from your insurance company for part of the casualty loss. You reported the $1,000 on your 2023 
federal income tax return as a recovery of an amount previously claimed. Wisconsin won’t tax the $1,000 because you 
didn’t claim the casualty loss for the itemized deduction credit on your Wisconsin return.

 Line 62 – Repayment of Income Previously Taxed
If you had to repay, during 2023, an amount that you included in your Wisconsin income in an earlier year, you may be 
able to subtract the amount repaid. A subtraction may be claimed only for repayments that are allowed as a miscellaneous 
itemized deduction on your federal Schedule A.

If you did not itemize deductions for federal tax purposes, use the amounts that would be deductible if you had itemized 
deductions. To determine the amounts to use, complete a federal Schedule A. Write “Wisconsin” at the top of this Schedule 
A and include it with your Form 1NPR. Note: Miscellaneous itemized deductions subject to the 2% of adjusted gross income 
limit are no longer allowed as itemized deductions on federal Schedule A pursuant to Public Law 115-97 for taxable years 
2018 through 2025. These amounts are also no longer allowable as a deduction on federal Schedule A for Wisconsin 
purposes. Therefore, a subtraction may not be claimed on line 62 of your 2023 Schedule M.

                                                    - 18 -

Caution:  Only amounts previously included in Wisconsin income may be claimed as a subtraction.

If the amount repaid was over $3,000, you may be able to subtract the repayment as described above or take a tax credit. 
See the instructions for Form 1NPR, line 62.

  Line 65 – Human Organ Donation
If you were a full-year resident of Wisconsin for 2023 and you, your spouse, or a person who is claimed as a dependent 
on your federal income tax return donated one or more of their human organs to another person for human organ 
transplantation, you may subtract certain unreimbursed expenses related to the organ donation. “Human organ” means all 
or part of a liver, pancreas, kidney, intestine, lung, or bone marrow. The subtraction may be claimed only in the taxable year 
in which the transplantation occurs. The subtraction may be claimed only once. The subtraction is equal to the amount of 
your unreimbursed expenses for travel, lodging, and lost wages, but not more than $10,000.

 Line 66 – Expenses Paid to Related Entities
If you were required to make an addition modification on line 8 for interest, rental expenses, intangible expenses, and 
management fees paid to a related entity, see Schedule RT to find out if you qualify for a subtraction. Although you must 
meet one of the conditions in Schedule RT, Part II, to qualify for a subtraction, you do not need to include Schedule RT 
with your return unless the total deduction of all the expenses reduces Wisconsin taxable income by more than $100,000. 
If enclosing Schedule RT, also fill in “16” in the Special Conditions box on page 1 of Form 1NPR.

If Schedule RT is required, you must file it with your Wisconsin income tax return no later than the extended due date 
of the return. If you file your return before the extended due date and forget to include the Schedule RT, you may file an 
amended return until the extended due date to include the Schedule RT. For pass-through entities, such as tax-option (S) 
corporations, partnerships, limited liability companies treated as partnerships, estates, and trusts, the pass-through entity 
is responsible for filing Schedule RT where required. The shareholder, partner, member, or beneficiary doesn’t have to file 
Schedule RT for expenses that are passed through.

See sec. Tax 3.01(4)(a), Wis. Adm. Code, for rules relating to this subtraction.

 Line 67 – Income from a Related Entity
If you reported income from a related entity that was not able to claim a deduction for the related expenses, you may claim 
a subtraction for the amount of income reported on your return. In order to claim this subtraction, Schedule RT-1 must be 
completed and included with your Wisconsin income tax return. Both the payer and payee must complete the appropriate 
section of the same Schedule RT-1.
 
See sec. Tax 3.01(5), Wis. Adm. Code, for rules relating to this subtraction.

 Line 68 – Sales of Certain Insurance Policies
To the extent included in federal adjusted gross income, the original policy holder or original certificate holder who has 
a catastrophic or life-threatening illness or condition may subtract the amount of income received from the sale of a life 
insurance policy or certificate, or the sale of the death benefit under a life insurance policy or certificate, under a life 
settlement contract. “Catastrophic or life-threatening illness or condition” includes AIDS and HIV infection.

 Line 69 – Physician or Psychiatrist Grant
To the extent included as income in the Wisconsin column (column B) of Form 1NPR, any amount received by a physician 
or psychiatrist from the primary care and psychiatry shortage grant program under sec.    39.385, Wis. Stats., may be 
subtracted.

 Line 70 – Olympic, Paralympic, and Special Olympic Medals and United State Olympic Committee and Special  
 Olympic Board of Directors Prize Money
Persons who win medals at the Olympic and Paralympic Games generally exclude the value of such medals and the 
amount of prize money received from the U.S. Olympic Committee from federal income. Because the starting point for 
computing Wisconsin taxable income is federal adjusted gross income (FAGI), the amount that is excluded from federal 
income is automatically excluded from Wisconsin income and no additional subtraction is allowed for Wisconsin.

There are two situations where a Wisconsin subtraction may be claimed for the value of medals and any prize money. In 
these situations, the value of medals and any prize money would have been included in FAGI and a Wisconsin subtraction 
is allowed.

                                                 - 19 -

•  Persons with FAGI over $1,000,000 ($500,000 if married filing a separate return) must include the value of medals and 
 any prize money in federal income. Such persons may claim the Wisconsin subtraction for the value of medals and any 
 prize money received from the U.S. Olympic Committee.
•  Persons who participate in the Special Olympics may claim a subtraction for the value of medals and any prize money 
 received from the Special Olympics Board of Directors.

 Line 71 – AmeriCorps Education Awards
If you received an AmeriCorps education award in 2023 to pay for your qualified student loans or educational expenses or 
to participate in approved school-to-work programs, you may subtract the amount received on line 71 which was included in 
federal adjusted gross income on line 9 of federal Schedule 1 (Form 1040). Caution: Do not include any amounts included 
on line 42 as a tuition and fee expense subtraction or amounts included on line 21 of federal Schedule 1 (Form 1040) as a 
student loan interest deduction.

 Line 72 – Differences in Federal and Wisconsin Basis of Assets
Subtractions may be necessary if there is a difference between the federal basis and the Wisconsin basis of your property. 
Subtractions are necessary if:

(1)  You acquired property in a taxable year beginning after December 31, 2013, which may be depreciated or amortized  
    (such as buildings and leaseholds), and the federal basis was less than the Wisconsin basis at the time you acquired  
   the property. 
(2)  You sold (or otherwise disposed of) property which may not be depreciated or amortized (such as land, stocks, and  
   bonds) in a taxable transaction, and your basis in the assets was less for federal purposes than for Wisconsin. 

Compute the amount of any subtraction due to a difference in basis on Wisconsin   Schedule T,   Transitional Adjustments. 
Include the completed Schedule T with your return. 

Exceptions: Do not use line 72 for the following situations:
 
•   If the difference in basis is due to the difference in the federal and Wisconsin definition of the Internal Revenue Code  
 (for example, Wisconsin did not allow bonus depreciation for tax year 2022), use Schedule   toIadjust for the difference  
 in depreciation for each year there is a difference in depreciation due to the difference in basis.
•  If the difference in basis is due to using a different federal election for Wisconsin, (for example, electing to claim a different 
 amount of sec. 179 expense), use Schedule  toI adjust for the difference in depreciation as a result of the difference in 
 federal and Wisconsin basis, or submit a pro forma federal return based on the election chosen for Wisconsin.
•  If you sold your interest in a partnership and any increases or decreases were made to the federal basis of your partnership 
 interest in taxable years prior to 1975, which resulted from partnership business or property located outside Wisconsin. (Prior 
 to 1975, Wisconsin did not tax income from business or property located outside Wisconsin.) Compute any adjustment due 
 to a difference in basis on Schedule T and net with other capital gains and losses on Wisconsin Schedule WD.
•  If the difference in basis has been entered on lines 6 and 15 of Schedule WD.
 
 Line 73 – Reserved for future use

 Line 74 – Differences in Federal and Wisconsin Reporting of Marital Property (Community) Income
If you are married filing a separate return or married filing as head of household or if you obtained a decree of divorce or 
separate maintenance during 2023, you may have to report a different amount of income on your Form 1NPR than on your 
federal return. Fill in on line 74 any amount which is taxable to your spouse rather than to you because of any difference 
in federal and state reporting of marital property (community) income. For further information, get      Publication 109,  Tax 
Information for Married Persons Filing Separate Returns and Persons Divorced in 2023. See page 13 of the Form 1NPR 
instructions for information on how to get this publication.

Note: For Wisconsin income tax purposes, the marital property law applies only while both you and your spouse are 
domiciled in Wisconsin. During any period that you and your spouse aren’t both domiciled in Wisconsin, you must report 
your income based on title and ownership under the common law property system.
                                                            - 20 -

 Line 75 – Other Adjustments
Fill in the total of the other adjustments that are included in the total on lines 23 and 25 of federal Schedule 1 (Form 1040).

Exception: For any period in which you were not a resident of Wisconsin, do not include:

•  Reforestation expenses related to property located outside Wisconsin.
•  Attorney fees and court costs involving an unlawful discrimination claim if the judgment or settlement resulting from the 
 claim is not taxable by Wisconsin.
•  Contributions to sections 403(b) and 501(c)(18)(D) plans unless you had wages or trade or business income taxable by 
 Wisconsin.
•  Expenses from the rental of personal property if the property is located outside Wisconsin.

Note: If you had wages or trade or business income taxable by Wisconsin, your contributions to sections 403(b) and 501(c)
(18)(D) plans must be prorated on the basis of your wages and net earnings from a trade or business taxable by Wisconsin 
to total wages and net earnings from a trade or business.

 Required Attachments for Subtractions Reported on Lines 76, 77, 80, 81, and 82

Line 77 or 81: Submit a copy of the federal Schedule E and any related form (e.g., Form 8582) if you had to recompute the 
income or loss due to differences in the adopted Internal Revenue Code or different federal elections for federal and Wisconsin 
purposes (Schedule I modifications). The Schedule E and other forms should state “Revised for Wisconsin” at the top.
 
Line 76, 80, or 82: Submit a copy of the related Schedule 2K-1, 3K-1, or 5K-1 and all supplemental schedules. 

If you filed electronically, attach them as PDF documents to your electronically filed return. If you cannot attach and submit the 
PDF documents with your e-filed return, you can upload the PDF documents through the department’s website using Form 
W-RA at https://tap.revenue.wi.gov/WRA/. If you cannot create PDF documents, you can mail the attachments with Form W-RA 
to the address listed on the form.

 Line 76 – Charitable Contributions from Tax-option (S) Corporations
If you were a shareholder of a tax-option (S) corporation, you may elect to treat your charitable contributions reported 
on Schedule 5K-1, line 12a, as a subtraction modification instead of an itemized deduction for the Wisconsin itemized 
deduction credit. Your subtraction is limited to the amount actually deductible for federal purposes (as allowable under 
Wisconsin law) on federal Schedule A (Form 1040). Include a copy of Schedule 5K-1, as described in the instructions in the 
preceding section. Enter the name and Federal Employer Identification Number (FEIN) of the tax-option (S) corporation on 
the line(s) provided. If you have more than 2 entries, attach a schedule listing each additional entry. 

If the tax-option (S) corporation elected to be taxed at the entity level, do not take a subtraction for charitable contributions 
reported on Schedule 5K-1. In addition, these amounts may not be used in the computation of the itemized deduction credit.

 Line 77 – Tax-option (S) Corporation Adjustments
Fill in any of the following adjustments that apply to you: 

(1)  If you were a shareholder of a tax-option (S) corporation and have a shareholder-level deduction, such as prior year loss 
    or section 179 expense from the entity that was previously suspended, enter the adjustment allocable to Wisconsin as a
    positive number.

(2)  If you are a shareholder of a federal S corporation that elects not to be treated as a Wisconsin tax-option (S) corporation,  
   you must reverse all items of S corporation income included on your federal return. Caution: Do not reverse any item  
   of S corporation income reported on federal Schedule D. These items have already been removed from Wisconsin  
   income when you completed Wisconsin Schedule WD. 

(3)  Instead of  using  tax-option  (S) corporation  items deductible on  federal  Schedule A  (Form  1040)  to compute  the  
 Wisconsin itemized deduction credit, you may elect to treat these items as subtraction modifications. Your subtraction  
 is limited to the amount actually deductible for federal purposes (as allowable under Wisconsin Law) on federal  
 Schedule A (Form 1040).  Note:  If you are electing to treat charitable contributions as a subtraction modification, see 
 the line 76 instructions.

See line 29 instructions for reporting additions.
                                                            - 21 -

Required Attachments: See the instructions on page 21 under the section titled Required Attachments for Subtractions 
Reported on Lines 76, 77, 80, 81, and 82.

Enter the name and FEIN of the tax-option (S) corporation with a brief description of the reason for the adjustment on the 
line(s) provided. If you have more than 2 entries, attach a schedule listing each additional entry. For example, if you have a 
$1,000 subtraction from tax-option (S) corporation A and a $5,000 subtraction from tax-option (S) corporation B, enter two 
separate subtractions on line 77 and enter the name and FEIN of tax-option (S) corporation A and tax-option (S) corporation 
B with an appropriate description of each adjustment on the lines provided.

If the adjustment for the entity is the result of 2 or more shareholder-level adjustments, include a dollar value with each 
adjustment in the description. Example: PY basis losses of $3,000 and passive losses of $6,000.

For more information, get Publication 102, Wisconsin Tax Treatment of Tax-Option (S) Corporations and Their Shareholders. 
See page 13 of the Form 1NPR instructions for information on how to get this publication.

 Line 80 – Tax-option (S) Corporation Entity Level Tax Election Adjustments
If you were a shareholder of a tax-option (S) corporation that elected to be taxed at the entity level, net all items from the 
entity included in Wisconsin income and reported on column B of Form 1NPR. Subtract any net profit on this line. If the 
result is a net loss, see instructions for line 30. Note: If the tax-option (S) corporation made the election, the box will be 
checked on Schedule 5K-1, Part II, Item B, box 3.

You must enter the name and FEIN for each tax-option (S) corporation for which you are removing items from your Wisconsin 
income. See example below. 

Caution: Do not reverse any item of tax-option (S) corporation gain or loss reported on federal Schedule D. These items 
have already been removed from Wisconsin income when you completed Wisconsin Schedule WD. See the Schedule WD 
instructions for more information.

Caution: If you are a shareholder of a tax-option (S) corporation that did not make the entity-level election but it directly or 
indirectly owned another pass-through entity (lower tier) that made the election, you need to make a similar adjustment to 
your income, except only for your share of that lower tier’s items. Box 4 of Part II, Item B will be checked on the Schedule 
5K-1 if a lower tier elected to pay the entity level tax. The tax-option (S) corporation is required to provide you a supplemental 
statement detailing your share of income, gain, loss, and deduction that have been taxed by a lower-tier entity.

Required Attachments: See the instructions on page 21 under the section titled Required Attachments for Subtractions 
Reported on Lines 76, 77, 80, 81, and 82. 

For more information, get Publication 102, Wisconsin Tax Treatment of Tax-Option (S) Corporations and Their Shareholders. 
See page 13 of the Form 1NPR instructions for information on how to get this publication.

Example: Shareholder A was a nonresident of Wisconsin for the entire year in 2023 and owns 50 percent of Tax-option 
(S) Corporation. Shareholder A’s Wisconsin sources of income for 2023 from the entity are $2,000 of interest, $100,000 of 
federal ordinary business income, and a $5,000 ordinary loss from the sale of business assets. Tax-option (S) Corporation 
makes an election under sec. 71.365(4m)(a), Wis. Stats., to pay tax at the entity level for 2023. 

Tax-option (S) Corporation has $95,000 of ordinary business income for Wisconsin in 2023 due to the following differences: 

•  $10,000 of additional Wisconsin depreciation expense because of a different depreciable basis of an asset determined 
  under the IRC in effect for Wisconsin purposes 

•  $5,000 of Wisconsin tax paid by the tax-option (S) corporation with its 2022 Form 5S deducted on the 2023 federal Form 
  1120-S

Ignoring any other income and loss, Shareholder A must file the following forms:

• Schedule I to reduce federal adjusted gross income by $10,000 of additional depreciation

• Form 1NPR reporting the following income in column B: $2,000 of interest on line 2, ($5,000) of other losses from asset 
  sales on line 8, and $95,000 if ordinary business income from column (e) of Schedule 5K-1 on line 11.

• Schedule M, line 80, to report a $92,000 subtraction modification for Wisconsin income taxed at the entity level of the 
  tax-option (S) corporation 

                                                         - 22 -

Computation of the $92,000 subtraction from Wisconsin income reported by the tax-option (S) corporation
                                           Description                                              Amount
 Interest income sourced to Wisconsin                                                               $2,000
 Other losses from asset sales sourced to Wisconsin                                                 ($5,000)
 Net ordinary business income sourced to Wisconsin on column (e) of Schedule 5K-1                   $95,000
 Schedule M (line 80) - subtraction modification for Wisconsin income reported by the  
 tax-option (S) corporation                                                                         $92,000

 Line 81 – Partnership, Limited Liability Company, Trust, or Estate Adjustments
 If you were a member of a partnership or limited liability company (LLC) treated as a partnership, or you received income 
from an estate or trust, and you have an owner/beneficiary-level deduction, such as prior year loss or section 179 expense 
from the entity that was previously suspended, enter the adjustment allocable to Wisconsin as a positive number. 

Required Attachments: See the instructions on page 21 under the section titled Required Attachments for Subtractions 
Reported on Lines 76, 77, 80, 81, and 82.

Enter the name and FEIN of the partnership with a brief description of the reason for the adjustment on the line(s) provided. If 
you have more than 2 entries, attach a schedule listing each additional entry. For example, if you have a $1,000 subtraction 
from partnership A and a $5,000 subtraction from partnership B, enter two separate subtractions on line 81 and enter the 
name and FEIN of partnership A and partnership B with an appropriate description of each adjustment on the lines provided. 

If an adjustment  for the entity is the result of 2 or more owner/beneficiary-level adjustments, include a dollar value with 
each adjustment in the description. Example: PY basis losses of $3,000 and passive losses of $6,000.

 Line 82 – Partnership Entity Level Tax Election Adjustments
If you were a partner or member of a partnership or LLC treated as a partnership that elected to be taxed at the entity level, 
net all items from the entity included in Wisconsin income and reported on column B of Form 1NPR. Subtract any net profit 
on this line. If the result is a net loss, see the instructions for line 32. Note: If the partnership made the election, the box will 
be checked on Schedule 3K-1, Part C, box 3. 

You must enter the name and FEIN for each partnership for which you are removing items from your Wisconsin income. 
See example below. 
Caution: Do not reverse any item of partnership gain or loss reported on federal Schedule D. These items have already 
been removed from Wisconsin income when you completed Wisconsin Schedule WD. See the              Schedule WD instructions 
for more information.

Caution: If you are a partner of a partnership that did not make the entity-level tax election, but it directly or indirectly 
owned another pass-through entity (lower tier) that made the election, you need to make a similar adjustment to your 
income, except only for your share of that lower tier’s items. Box 4 of Part C on Schedule 3K-1 will be checked if a lower tier 
elected to pay the entity level tax. The partnership is required to provide you a supplemental statement detailing your share 
of income, gain, loss and deduction that have been taxed by a lower-tier entity. Note: This also applies to beneficiaries of 
an estate or trust that directly or indirectly owned a tax-option (S) corporation or partnership that elected to pay the entity 
level tax. In this instance, Box D of Part II on the Schedule 2K-1 will be checked. Enter the name and FEIN of the estate or 
trust along with the amount of income/loss taxed at a lower tier on line 32 or 82, as appropriate.

Required Attachments: See the instructions on page 21 under the section titled Required Attachments for Subtractions 
Reported on Lines 76, 77, 80, 81, and 82.. 

Example: Partner A was a nonresident of Wisconsin for the entire year in 2023 and owns 50 percent of Partnership. 
Partner A’s Wisconsin sources of income for 2023 from the entity are $100,000 of federal ordinary business income and a 
$5,000 ordinary loss from the sale of business assets. Partnership makes an election under sec. 71.21(6)(a), Wis. Stats., 
to pay tax at the entity level for 2023.

Partnership has $95,000 of ordinary business income for Wisconsin in 2023 due to the following differences: 

•  $10,000 of additional Wisconsin depreciation expense because of a different depreciable basis of an asset determined 
 under the IRC in effect for Wisconsin purposes 

•  $5,000 of Wisconsin tax paid by the partnership with its 2022 Form 3 deducted on the 2023 federal Form 1065 

                                                       - 23 -

Ignoring any other income and loss, Partner A must file the following forms: 

• Schedule I to reduce federal adjusted gross income by $10,000 of additional depreciation

• Form 1NPR reporting the following income in column B: ($5,000) of other losses from asset sales on line 8, and $95,000 
  of ordinary business income from column (e) of Schedule 3K-1 on line 11.
 
• Schedule M, line 82, to report a $90,000 subtraction modification for Wisconsin income taxed at the entity level of the 
  partnership.

Computation of the $90,000 subtraction from Wisconsin income reported by the partnership

                                            Description                                                         Amount
 Other losses from asset sales sourced to Wisconsin                                                             ($5,000)
 Net ordinary business income sourced to Wisconsin on column (e) of Schedule 3K-1                               $95,000
 Schedule M (line 82) - subtraction modification for Wisconsin income reported by the
   partnership                                                                                                  $90,000

 Line 83 – Other Subtractions from Income
Fill in on line 83 amounts not taxable by Wisconsin less related expenses, except expenses used to figure the Wisconsin 
itemized deduction credit, which have been included on Form 1NPR, lines 1 through 15 in column B (Wisconsin column). 
Fill in the type of income and amount on the lines provided. If additional space is needed, attach a schedule listing the types 
and amounts of income reported on line 83.

Example: Wisconsin doesn’t tax certain relocation assistance payments received by persons displaced by condemnation, 
subject to the conditions set forth in sec. 32.19, Wis. Stats.

State Grant Programs During the COVID-19 Pandemic

The following income is exempt from Wisconsin income and franchise tax:

• Income received from the state of Wisconsin with money received from the coronavirus relief fund authorized under     42 
  USC 801 to be used for any of the following purposes:

  ◦ Grants to small businesses                                      ◦ Lodging industry grants
  ◦ A farm support program                                          ◦ Low-income home energy assistance
  ◦ Broadband expansion                                             ◦ A rental assistance program
  ◦ Privately owned movie theater grants                            ◦ Supplemental child care grants
  ◦ A nonprofit grant program                                       ◦ A food insecurity initiative
  ◦ A tourism grants program                                        ◦ Ethanol industry assistance
  ◦ A cultural organization grant program                           ◦ Wisconsin Eye
  ◦ Music and performance venue grants

• Income from these programs is included in federal income pursuant to sec.  61 of the Internal Revenue Code, unless an 
  exception applies. For Wisconsin, this income should be excluded from federal adjusted gross income on line 83. Use  
  a description similar to “Wisconsin COVID-19 Program Funds.”

Restaurant Revitalization Grants
Caution: Wisconsin has not adopted section 9673 of Public Law 117-2 (American Rescue Plan Act of 2021) relating to 
restaurant revitalization grants for purposes of figuring federal adjusted gross income for Wisconsin purposes. An adjustment 
is required on Schedule I to add the amount of the grant excluded back to federal adjusted gross income. The amount of the 
grant received should be included on Form 1NPR, both columns A and B. However, this amount is exempt from Wisconsin 
income tax and may be subtracted on line 83.

Income received in the form of a grant issued by the restaurant revitalization fund under section 5003 of Public Law 117-2 
(American Rescue Plan Act of 2021), is exempt from Wisconsin income and franchise taxes. This income should be excluded 
from federal adjusted gross income on line 83. Use a description similar to “Restaurant Revitalization Grants.” Note: Expenses 
paid for with state grant programs and restaurant revitalization grants and deducted in the computation of federal adjusted 
gross income are not required to be added back on the Wisconsin return.

                                                              - 24 -

Investment in a Wisconsin Qualified Opportunity Fund (QOF)
You may qualify for a subtraction modification for an investment in a Wisconsin QOF under sec. 71.05(25m), Wis. Stats., if 
all of the following conditions are met:

•  In a previous year, you deferred paying tax on a capital gain by investing in a Wisconsin QOF.
•  For the year in which you invested in the Wisconsin QOF, the Wisconsin QOF properly filed Wisconsin Form WQOF and 
 provided a copy to you. Exception: Form WQOF is not required for taxable years beginning prior to January 1, 2020.
•  You held the investment in the Wisconsin QOF for at least 5 years.
•  For taxable year 2023, you qualify for the federal exclusion for investment in a qualified opportunity zone.
•  You are not excluding or deferring the gain on Schedule QI or Schedule CG under the qualified Wisconsin business  
 program

If the above conditions are met, you may use the following worksheet to calculate your subtraction.

                                        Worksheet - Wisconsin QOF Subtraction
  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%   ....................   1.
 2.  Amount of deferred gains from the investment in a WI QOF  .............................   2.
 3.  Multiply line 2 by line 1. This is the amount of the subtraction to report on Schedule M, Part II,  
    line 83. Use a description similar to “Wisconsin QOF subtraction”   ........................   3.

Caution: If you are a partner in a partnership or a shareholder in a tax-option (S) corporation, do not include a “Wisconsin 
QOF subtraction” from Schedule 3K-1, Part V, line 15, or Schedule 5K-1, Part IV, line 18, in the worksheet above. Amounts 
shown on Schedules 3K-1 or 5K-1 should be reported on the appropriate line(s) of Form 1NPR, column B, or Schedule M 
with other items of income, gain, loss, or deduction, from the partnership or tax-option (S) corporation.

 Additional Information
For more information, you may:
Call:  (608) 266-2486
Email: DORIncome@wisconsin.gov
Write:  Mail Stop 5-77
       Wisconsin Department of Revenue
       PO Box 8949
       Madison WI  53708-8949

                                        Applicable Laws and Rules
 This document provides statements or interpretations of the following laws and regulations enacted as of November 9, 2023:  
 secs. 21, 67, 74,162, and 1291, IRC, ch. 71, Wis. Stats., and sec. Tax 3.01, Wis. Adm. Code 

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