Wisconsin Income tax – Itemized deduction credit

The Wisconsin Department of Revenue has issued a personal income tax notice announcing that the itemized deduction credit was computed incorrectly on some 2013 Wisconsin income tax returns by certain tax preparation software. As previously reported, taxpayers with incomes over a certain threshold are subject to limitations on federal itemized deductions for 2013.

Beginning July 15, 2014, the department will correct returns with this error and send a notice of amount due. Taxpayers do not need to send an amended return for this error. Interest and penalties will not be assessed, so long as the bill is paid on or before the due date, because the IRS instructions were not available in time for the department to provide additional guidance on the topic in the Form 1 income tax booklet instructions.

If a taxpayer had a refund that he or she asked to be carried forward to the 2014 tax year, and the department uses the carryforward to pay the additional amount of tax due on the 2013 return, the taxpayer will be advised to make additional estimated payments for 2014 in order to avoid potential underpayment interest.