Free 2008 I-026 Wisconsin Schedule 2440W, Disability Income Exclusion - Wisconsin

SCHEDULE 2440W
WisconsinDepartmentofRevenue Enclose with Wisconsin Form 1 or 1NPR
Legalname(s)shownonForm1orForm1NPR

Disability Income Exclusion
(Applies Only to Disabled Retirees Under Age 65) See instructions on back.

2008
(2) SPOUSE

Your social security number

Date you retired

Employer'sname(alsogivepayer'sname,ifotherthanemployer)

Yourself Spouse
(1)YOURSELF

1 Fill in the amount of your disability pay which is included in your federal adjusted gross income .................................................................................. 1 2 Excludable disability pay (see instructions): (a) Multiply $100 by the number of weeks for which your disability payments were at least $100. Fill in the total ...................................................................... (b) If you received disability payments of less than $100 for any week, fillinthetotalamountyoureceivedforallsuchweeks ....................................... (c) Ifyoureceiveddisabilitypaymentsforlessthanaweek,fillinthe smaller amount of either the amount you received or the highest exclusion allowable for the period (see instructions) .......................................... (d) Add lines 2a, 2b, and 2c. Fill in the total .............................................................

2a 2b

2c 2d 3 4

3 Add amounts on line 2d, columns (1) and (2). Fill in the total in column (2) ................................................ 4 Fill in the smaller of line 1 (total of columns (1) and (2)) or line 3 ................................................................

5 Limit on exclusion (see instructions): (a) Fill in adjusted gross income from line 37 of federal Form 1040, line 21 of Form 1040A, or line 4 of Form 1040EZ ............................................... 5a (b) Amountusedtofigureanyexclusiondecrease .................................................. 5b $15,000.00 (c) Subtractline5bfromline5a.Ifline5bismorethanline5a,fillin-0- ................................................... 5c 6 Subtractline5cfromline4andfillinonline6.Ifline5cismorethanline4,fillin-0-. Full-yearresidents­Thisisyourdisabilityincomeexclusion.Fillinthisamountonline11 ofForm1.IffilingForm1NPR,seetheinstructionsforline1orline10ofForm1NPR. (Part-yearresidents­completelines7and8below.) .................................................................................

6 7

7 Part-yearresidents­Divideline6bythenumberofweeksyoureceiveddisabilitypayments ...................

8 Part-yearresidents­Multiplyline7bythenumberofweeksyouwereaWisconsinresidentand receiveddisabilitypayments.Thisisyourdisabilityincomeexclusion.Fillinhereandseethe instructionsforline1orline10ofForm1NPR ............................................................................................ 8 9 Ifyoufiledaphysician'sstatementforthisdisabilityinanearlieryear,pleasecheckthisbox. Youdonothavetofileanotherstatement.Ifyouhavenot,youmustfileaphysician'sstatement(seeinstructions).

Physician's Statement of Permanent and Total Disability
Please complete and return to the person named below.
Nameofdisabledperson

I certify that the person named above was (check only one box ­ please see instructions below) (1) Permanently and totally disabled on January 1, 1976, or January 1, 1977. (2) Permanently and totally disabled on the date he or she retired. Date retired
Physician'sname Physician'ssignature Physician'saddress Date

Instructions for Statement
Taxpayer Pleasefillinyourname.Ifyou retiredafterDecember31,1976,fillin yourretirementdateinthespaceafter box(2).
I-026

Physician Box(1)appliestotaxpayerswho retiredbeforeJanuary1,1977. Box(2)appliestotaxpayerswho retiredafterDecember31,1976.

What is Permanent and Total Disability? Apersonispermanentlyandtotallydisabledwhen­ ·Heorshecannotengageinanysubstantialgainful activitybecauseofaphysicalormentalcondition;and ·Aphysiciandeterminesthatthedisability(a)has lastedorcanbeexpectedtolastcontinuouslyforatleast ayear;or(b)canbeexpectedtoleadtodeath.

General Instructions
A. Purpose of Schedule­Personswhoreceivedisabilityincomemay beabletoexcludeaportionofitfromtheirtaxableincome.Completethis scheduletodeterminetheamount,ifany,ofyourexclusion. B. What is Disability Income­Generally,disabilityincomeisthe totalamountyouwerepaidunderyouremployer'saccidentandhealth planorpensionplaninsteadofwagesforthetimeyouwereabsentfrom workbecauseofpermanentandtotaldisability.However,anypayment youreceivedfromaplanthatdoesnotprovidefordisabilityretirement isnotdisabilityincome. C. Who Can Exclude Disability Income­Youcantaketheexclusion for2008ifyoumeetALLthesetests: · Youreceiveddisabilityincomewhichisnototherwiseexemptfrom Wisconsintax. · Youwerenotyet65whenyour2008taxyearended.(Ifyouwere bornonJanuary1,1944,youareconsideredtobeage65attheend of2008.) · Youretiredondisabilityandwerepermanentlyandtotallydisabled whenyouretired.(SeeInstructionD,WhatisPermanentandTotal Disability?andinstructionsforPhysician'sStatement.) · OnJanuary1,2008,youhadnotyetreachedtheagewhenyourem ployer'sretirementprogramwouldhaverequiredyoutoretire. · Youdidnotinanyyearpriorto1984choosetotreatyourdisability incomeasapensioninsteadoftakingtheexclusion. · Ifyouweremarriedattheendof2008,youmustfileajointreturn. · You were a Wisconsin resident when you received the disability income. Ifyoumeetthesetests,youcantaketheexclusionuntiltheearliestof thefollowingdates: (1) Thefirstdayofthetaxyearinwhichyouturn65.(Ifyouwereborn onJanuary1,1944,youareconsideredtobeage65attheendof 2008.) (2) Thedayyoureachtheagewhenyouremployer'sretirementpro gramwouldhaverequiredyoutoretire. D. What is Permanent and Total Disability?­Apersonisperma nentlyandtotallydisabledwhen: · Heorshecannotengageinanysubstantialgainfulactivitybecause ofaphysicalormentalcondition;and · A physician determines that the condition (1) has lasted or can be expectedtolastcontinuouslyforatleastayear;or(2)canbeexpected toleadtodeath. Theexamplesbelowshowsubstantialgainfulactivity.Insuchcases, thedisabilityincomeexclusioncannotbetaken. Example 1:Sue,whowasasalesclerk,retiredondisability.Shenow worksasafulltimebabysitterattheminimumwage.AlthoughSuedoes differentwork,shebabysitsonordinarytermsfortheminimumwage.She cannottaketheexclusionbecausesheisengagedinasubstantialgainful activity. Example 2:Mary,presidentoftheXYZCorporation,retiredondis ability because of terminal illness. On her doctor's advice, she works parttimeasamanagerandispaidmorethantheminimumwage.Her employersetsherdaysandhours.AlthoughMary'sillnessisterminaland sheworksparttime,theworkisdoneatheremployer'sconvenience.She isconsideredengagedinasubstantialgainfulactivityandcannottakethe exclusion. Thefollowingexampleshowsapersonwhomightnotbeconsidered tobeengagedinasubstantialgainfulactivity. Example: John, who retired on disability, took a job with a former employeronatrialbasis.ThepurposeofthejobwastoseeifJohncould dothework.ThetrialperiodlastedforsometimeduringwhichJohnwas paidatarateequaltotheminimumwage.BecauseofJohn'sdisability,

hewasgivenonlylightdutiesofanonproductive,makeworknature. Unlesstheactivityisbothsubstantialandgainful,Johnisnotengagedin asubstantialgainfulactivity.TheactivitywasgainfulbecauseJohnwas paidatarateatorabovetheminimumwage.However,theactivitywas notsubstantialbecausethedutieswereofanonproductive,makework nature.MorefactsareneededtoestablishJohn'sabilitytoengageina substantialgainfulactivity.

Specific Instructions
Lines 2a and 2b­Youcanexcludeeitheryouractualweeklydisability payor$100aweek,whicheverisless.Thefollowingtableshowshowto figureyourweeklydisabilitypay. Your weekly pay is the following part of what Pay period you receive each pay period Weekly................All Every2weeks.....Half Twiceamonth.....Multiplyyourpayby24,anddividetheresultby52 Eachmonth.........Multiplyyourpayby12,anddividetheresultby52 Other...................Divideyouryearlypayby52 Line 2c ­ Ifyoureceiveddisabilitypayforpartofaweek,followthe stepsbelow. Step 1. Divide$100bythenumberofdaysaweekyounormallyworked beforeyouretired. Step 2. Dividethedisabilitypayyoureceivedbythenumberofdays itcoveredinthatweek. Step 3. ComparetheStep1andStep2amounts.Thesmalleramount isyourdailyrate.Yourexclusionfortheweekisbasedonit. Step 4. Multiplyyourdailyratebythenumberofdaysyoureceived disability pay in the short week. The result is your exclusion for that week. Step 5. Addyourexclusionforthatweektoyourexclusionforany othershortweeks.Fillinthetotalonline2c. Disabilitypaymentsaremadeforpartofaweekwhenoneofthefol lowinghappensafterthefirstdayofthetaxpayer'snormalworkweek: (1) Thedisabilityretirementbegins. (2) Thedisabilityretirementendsbecausethetaxpayerreachesrequired retirementage. (3) Thetaxpayerdies. Line 5­Generally,themostapersoncanexcludeis$5,200.Thisex clusiongoesdown,dollarfordollar,byanyamountover$15,000online 5a. Generally,noexclusionisleftifline5ais­ · $20,200ormore,andonepersoncouldtaketheexclusion. · $25,400ormore,andbothhusbandandwifecouldtaketheexclu sion. Physician's Statement ­ If you did not check the box on line 9 of Schedule2440W,youmusthaveyourphysiciancompleteastatement ofpermanentandtotaldisability.YoucanusethestatementonSchedule 2440Wforthispurpose.However,ifyouarefilingfederalScheduleR andyourphysiciancompletedaPhysician'sStatementforusewiththat form,youmaysubmitacopyofthatstatementinsteadofcompletingthe physician'sstatementonSchedule2440W. If both husband and wife take the exclusion, each must file a state ment. If you retired on disability before January 1, 1977, the physician's statementmustshowthatyouwerepermanentlyandtotallydisabledon January1,1976,orJanuary1,1977. Ifyouretiredondisabilityafter1976,thephysician'sstatementmust showthatyouwerepermanentlyandtotallydisabledwhenyouretired. IftheDepartmentofVeteransAffairs(VA)certifiesthatyouareper manentlyandtotallydisabled,youcanfileVAForm210172insteadof thephysician'sstatement.VAForm210172mustbesignedbyaperson authorizedbytheVAtodoso.YoucangetVAForm210172fromyour localVAregionaloffice.