AB 688

Under current law, the homestead tax credit is a refundable income tax credit

that may be claimed by homeowners and renters. The credit is based on the

claimant's household income and the amount of property taxes or rent constituting

property taxes on his or her Wisconsin homestead. Because the credit is refundable,

if the credit exceeds the claimant's income tax liability, he or she receives the excess

as a refund check. Under current law, there are three key dollar amounts used when

calculating the credit:

1. If household income is $8,060 or less, the credit is 80 percent of the property

taxes or rent constituting property taxes. If household income exceeds $8,060, the

property taxes or rent constituting property taxes are reduced by 8.785 percent of the

household income exceeding $8,060, and the credit is 80 percent of the reduced

property taxes or rent constituting property taxes.

2. The credit may not be claimed if household income exceeds $24,680.

3. The maximum property taxes or rent constituting property taxes used to

calculate the credit is $1,460.

Beginning with claims filed in 2021, this bill increases the maximum income

amount from $24,680 to $30,000. The bill also indexes the $8,060, $30,000, and

$1,460 amounts for inflation, beginning in 2023.