How Much Is the Homestead Credit in Wisconsin?

The Wisconsin Homestead Credit offers financial relief to eligible low-income homeowners and renters by reducing their property tax burden. This program provides assistance when property taxes or rent become a significant portion of a household’s income. The credit can either reduce a claimant’s Wisconsin income tax liability or result in a direct cash refund if the credit amount exceeds any taxes owed.

Meeting Eligibility Requirements

To qualify for the Wisconsin Homestead Credit, specific conditions must be met. Claimants must be Wisconsin legal residents for the entire claim year (January 1 through December 31) and at least 18 years of age by December 31. Generally, a claimant cannot be claimed as a dependent on someone else’s federal income tax return, with an exception for those aged 62 or older.

The credit applies to individuals who occupied and either owned or rented a Wisconsin homestead subject to property taxes during the claim year. A “homestead” typically includes a house, apartment, rented room, mobile home, or farm, along with up to one acre of land, or up to 120 acres if it’s part of a farm. The homestead cannot have been exempt from property taxes for the entire year, unless it’s public housing where the housing authority makes payments in lieu of property taxes. Claimants must not have received Wisconsin Works (W2) payments or county relief payments of $400 or more for all 12 months.

Claimants must also meet an income requirement: their household income must be below a certain threshold ($24,680 for the 2024 tax year). Beyond this limit, individuals must satisfy one of three additional criteria: they, or their spouse if married and residing together, must have had earned income during the year; be disabled; or be at least 62 years of age by the end of the claim year.

Understanding Countable Income and Expenses

Determining eligibility and the amount of the Wisconsin Homestead Credit requires a specific calculation of “household income,” which is broader than adjusted gross income. This definition includes all income reportable for Wisconsin income tax (e.g., wages, interest, pensions) and non-taxable income sources like Social Security benefits, unemployment compensation, child support, untaxed IRA distributions, and public assistance payments (e.g., public assistance, gambling winnings).

A $500 deduction for each qualifying dependent can reduce total household income. For married individuals living together, both spouses’ incomes must be combined. Specific disqualified losses, such as net losses from sole proprietorships or capital losses, must be added back to household income for the calculation.

The credit calculation also considers qualifying property taxes or rent paid on the homestead. For homeowners, this includes property taxes levied for the claim year, regardless of when paid. Renters can include a portion of their rent as “rent constituting property taxes”; this is generally 25% of actual rent paid if heat is not included, or 20% if heat is included. The maximum amount of property taxes or rent that can be used in the calculation is capped at a specific figure, such as $1,460 for recent tax years.

Calculating Your Homestead Credit

The amount of the Wisconsin Homestead Credit is determined by a formula that considers the relationship between a claimant’s household income and their qualifying property taxes or rent. The credit aims to provide relief as household income increases, with the credit amount decreasing proportionally. For claimants whose household income is below a certain income threshold ($8,060 for recent tax years), the credit is typically 80% of their property taxes or rent constituting property taxes, up to the maximum allowable amount.

When household income exceeds this initial threshold, the calculation becomes a two-step process. First, a percentage of the income exceeding the threshold (e.g., 8.785% of income over $8,060) is subtracted from the allowable property taxes or rent. The resulting figure is then multiplied by 80% to arrive at the credit amount. The maximum credit available is capped (e.g., $1,168 for the 2024 tax year), and no credit is available if household income reaches or exceeds $24,680.

While a mathematical formula guides the calculation, the actual credit received may vary slightly. The Wisconsin Department of Revenue provides tables to determine the precise credit amount based on various income and property tax combinations. If the calculated credit is more than $0 but less than $10, the amount of the credit is typically set to $10.

Preparing and Submitting Your Claim

To claim the Wisconsin Homestead Credit, eligible individuals must complete a specific form provided by the Wisconsin Department of Revenue (DOR), typically Schedule H or the simplified Schedule H-EZ. Schedule H-EZ can be used by claimants with simpler income sources and who meet certain conditions, such as not having married or divorced during the claim year or using their home for business purposes.

Before completing the form, gather all relevant financial documents, including W-2s, 1099s, Social Security statements, and other income statements to accurately report household income. Homeowners will need their property tax bills, while renters must obtain a Rent Certificate (Form LC-100) from their landlord, verifying the amount of rent paid that qualifies for the credit.

The completed Schedule H or H-EZ can be filed either with a Wisconsin income tax return or as a standalone claim if no income tax return is required. Electronic filing is often the fastest method for processing claims and receiving refunds. If filing electronically, claimants generally need to submit a Form W-RA, Required Attachments for Electronic Filing, along with supporting documents within 48 hours of receiving Wisconsin acknowledgment. Paper claims should be completed clearly to facilitate scanning and processing.

After submission, processing times for the Homestead Credit can vary, typically taking up to 12 weeks depending on the time of year the claim is filed. If additional information is needed or if there are discrepancies, the DOR may send a letter requesting clarification, which can extend the processing time. The credit is then issued either through direct deposit to a bank account or via a paper check.