Am I Eligible for the Wisconsin Property Tax Credit as a 100% Disabled Veteran?

This question came from one of our users:

"Hello, I have what I believe to be an unusual situation. I was deemed 100% disabled by the V.A. on 05/29/2024. As to my understanding, I would be eligible for the Wisconsin property tax credit. I attached a copy of my WDVA 2098 stating my eligibility for 2024 with other documents to my tax preparer."

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You may be eligible for the Wisconsin Property Tax Credit as a 100% disabled veteran.  Factors to consider are how the property is used, how large the property is, where you began your service, and how long you have lived in Wisconsin. Wisconsin provides a property tax credit for Veterans who have received a 100% disability rating and who have lived in the state of Wisconsin for at least 5 years or lived in Wisconsin when starting their military service. 

The property must be the Veteran's primary residence, and the residence must be only an acre or less. Additionally, unmarried surviving spouses are also eligible. 

Quick Facts:  

• The credit is available only for taxes paid on a principal residence.  It cannot be used for taxes paid on a vacation home.
• There is no limit on the amount that may be claimed. The credit is especially based on property taxes you paid on your principal residence and the surrounding land during the year that does not exceed one acre and is reasonably necessary for the use of the residence as your principal residence. The taxes may be the prior year's taxes or this current year's taxes. The only requirement to consider is if the taxes were paid during the year for which you are claiming the credit.  

For example, Bob claims the veterans and surviving spouses' property tax credit on his 2025 return. The property taxes eligible for purposes of computing the credit are those for Bob from January 1, 2025, through December 31, 2025. 

• If you and your spouse are both veterans and both of you qualify for the credit independently of each other, you can claim the credit on either a joint tax return or on separate returns. If we assume you reside in the same principal residence, on a joint return, you claim a credit for the amount of property taxes paid on that principal residence during the year and the land surrounding it, not to exceed one acre.  This area should be considered reasonably necessary for the use of the residence as a principal residence. If you choose to file separate returns and the property is owned by each of you as joint tenants, tenants in common, or as marital property, each spouse can claim the credit based on their ownership percentage (typically one-half). 
• You can only use the portion of your property taxes that can be allocable to the personal use of your home. Do not include any property taxes that may be attributable to trade or business expenses. 
• If you own a duplex, you can only use the portion of the property taxes attributable to the portion of the duplex that is your sole principal residence.  

For example, Sally owns a duplex; if both halves of the duplex are of equal size, Sally can use only one-half of the property taxes paid on the duplex during the year when claiming the credit. 

• If you or your eligible unremarried surviving spouse has a life estate in a property used as your principal residence, you can claim the credit based on the amount of property taxes you paid on the property. Life estates must be in writing and incorporated in a warranty deed or other legal document. It must be signed and dated by the person creating the life estate AND the person receiving the life estate. If the tax bill does not show you as having a life estate (and you do), you must submit a copy of the life estate document (deed or other document), in addition to a copy of the property tax bill, as well as proof of your payment to claim the credit. 

For Example, Abe (an eligible vet), Sandy, and their child Tom reside in the same house. Prior to the year of the credit claim, Abe transferred the property to Tom via q quit-claim deed but retains a life estate in the property. Abe pays the property taxes, but the property tax bill comes in Tom's name. Abe would follow the above steps to claim the credit on the taxes he has paid.  

• As stated above, if you are a qualified veteran and hold a life estate in a property, you can claim the property taxes you paid for the property tax credit. Let's explore property held in trust.  
• There are two broad categories of trusts: (1) "testamentary" and (2) "inter vivos" or "living" trusts.  A living trust can be "revocable" (the trust creator can still amend, modify, or end the trust during their lifetime) or "irrevocable" (the creator cannot change or end the trust). Title to property in a trust is held by the trust, not by the beneficiary (person(s) who received value or assets from the trust). If you have created a revocable trust (reserving the right to revoke (end) the trust, you can claim the property taxes you paid for the credit.  
• Remember, you can only claim a portion of property taxes that matches your and/or your spouse's percentage of ownership in a primary residence. If you are tenants in common, you would use the ownership percentage you and your spouse have in that property.  This ownership percentage can be found on your tenancy in the common agreement. If you are joint tenants, you will divide by the number of owners to calculate the percentage you can claim.  
• For example, Jim and Anne own a home with someone else, Dan.  Jim would take 1 divided by 3, or 33.33% ownership, for each joint tenant, Jim, Anne, and Dan. Therefore, Jim and Anne would own 66.67% of the house. If Jim paid $3,000 in property taxes for the year, Jim would be able to claim $2,000 of property taxes for the credit. 

Bonus Points! What if I rent? 

If you had to pay property taxes as part of your rent, you can claim the credit based on the property taxes you paid during the year, as long as the following criteria were met: 

• The rental property is your or your surviving spouse's principal residence. 
• The rental is in Wisconsin. 
• You or your surviving spouse are required to pay the property taxes under a rental agreement (lease) or other separate written agreement with your landlord. 
• You or your surviving spouse must pay the property taxes directly to the city or town.  

Submit your landlord agreement and proof of property tax payments to your city or town to be included with the Wisconsin income tax return. 

Visit https://dva.wi.gov/ for more information.  

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Designed for general information use only. The content above does not constitute legal advice or the formation of an attorney/client relationship.