Instructions For 2015 Form 6y: Wisconsin Subtraction Modification For Dividends
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4Instructions for 2015 Form 6Y:
Wisconsin Subtraction Modification for Dividends
Purpose of Form 6Y
If the payee corporation is in a combined group, it must
own the stock of the payer corporation for the payee’s
Combined groups complete Form 6Y to report the
entire taxable year that is included in the combined re-
amount of dividends that may be subtracted from fed-
turn.
eral taxable income under the Wisconsin dividends re-
ceived deduction. Combined groups also use Form 6Y
For purposes of Form 6Y, the Wisconsin dividends re-
to report the amount of intra-group dividends that may
ceived deduction under sec. 71.26(3)(j), Wis. Stats., is
called the “70% ownership” dividend deduction.
be eliminated from combined unitary income in cases
where the Wisconsin dividends received deduction
does not apply.
Elimination of Dividends from Combined Unitary
Income
Enter the information for each member in a separate
column. If there are more than three members, use ad-
The elimination of dividends from combined unitary in-
ditional Forms 6Y. For example, if there are seven
come applies only to corporations that are in combined
members in the combined group, enter members one
groups. Under sec. 71.255(4)(f), Wis. Stats., and s.
through three on Form 6Y (do not complete the com-
Tax 2.61(6)(e), Wisconsin Administrative Code, a div-
bined total column yet). Next, enter members four
idend paid between two members of the same com-
bined group may be eliminated from the group’s com-
through six on an additional Form 6Y (do not complete
the combined total column yet). Finally, complete a
bined unitary income if it meets the following require-
new Form 6Y for the seventh and final member. Com-
ments:
plete the combined total column on the last Form 6Y
The dividend doesn’t already qualify for the Wis-
for all group members.
consin dividends
received deduction under
sec. 71.26(3)(j), Wis. Stats.
The dividend was paid out of earnings and profits
NOTE: Do not use Form 6Y to report dividends that
attributable to net income or loss that was included
are nontaxable for reasons other than the Wisconsin
in the group’s combined unitary income in the cur-
dividends received deduction or the elimination of
rent taxable year or a prior taxable year
intra-group dividends from combined unitary income.
The dividend does not exceed the payee’s basis
See the instructions for Form 6, Part II, line 4f, for
in the payer’s stock
reporting those dividends.
Transitional Rule. If the intra-group dividend was paid
out of earnings and profits (E&P) that were generated
Below is an explanation of each type of dividend re-
in a taxable year beginning before January 1, 2009,
portable on Form 6Y, followed by line-by-line instruc-
the dividend may be eliminated from combined unitary
tions.
income to the extent the net income that generated the
E&P would have been included in combined unitary
income under sec. 71.255, Wis. Stats., (the statute re-
quiring combined reporting) if that section had been in
effect in those years.
Wisconsin Dividends Received Deduction
Computing Earnings and Profits. The following
The Wisconsin dividends received deduction is avail-
rules apply to the computation of E&P for purposes of
able to corporations that are separate entity filers as
the dividend elimination:
well as combined group filers. Under sec. 71.26(3)(j),
Wis. Stats., a dividend is deductible for Wisconsin pur-
1. LIFO Rule: Dividends are treated as paid first out
poses if it meets the following requirements:
of current E&P. If the dividends paid exceed cur-
It is paid on common stock, and
rent E&P, then the dividends are treated as paid
out of E&P accumulated in preceding years, be-
The corporation receiving the dividend owned at
ginning with the year closest to the current year.
least 70% of the total combined voting stock of the
payer corporation for the entire taxable year.
IC-525
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