Schedule2440W: Schedule2440W (2024)

Who files this form

Use Schedule 2440W to figure your Wisconsin disability income exclusion for 2024. You can take the exclusion only if you meet all of these tests:

• You received disability income that is not otherwise exempt from Wisconsin tax.
• You were under age 65 at the end of 2024. If you were born on January 1, 1959, you are considered age 65 at the end of 2024.
• You retired on disability and were permanently and totally disabled when you retired.
• On January 1, 2024, you had not reached the age when your employer’s retirement program would have required you to retire.
• For any year before 1984, you did not choose to treat your disability income as a pension instead of taking the exclusion.
• If you were married at the end of 2024, you file a joint return.
• You were a Wisconsin resident when you received the disability income.

What you'll need

Have the following information ready:

• Your legal name as shown on Form 1 or Form 1NPR and your Social Security number.
• Your employer’s name, the payer’s name if different, and your retirement date.
• Your disability pay included in federal adjusted gross income, including any amount otherwise exempt from Wisconsin tax.
• Your weekly disability payments and, for partial weeks, the days covered and the number of days you normally worked each week before retiring.
• The amount from Form 1, line 3, or Form 1NPR, line 31.
• For part-year residents, the number of weeks you received disability payments and the number of those weeks you were a Wisconsin resident.

Disability statement: Unless you filed a physician’s statement for this disability in an earlier year, you must provide one. You may use the statement on Schedule 2440W or a copy of the physician’s statement completed for federal Schedule R. An authorized, signed VA Form 21-0172 may be used instead if the VA certifies that you are permanently and totally disabled.

How to file

Include Schedule 2440W with your Wisconsin Form 1 or Form 1NPR.

• Complete lines 1 through 6 to figure the exclusion.
• Full-year residents: enter the exclusion from line 6 on Schedule SB (Form 1), line 22.
• Part-year residents: also complete lines 7 and 8. Enter the exclusion from line 8 on Schedule M (Form 1NPR), line 56.
• Check line 9 if you filed a physician’s statement for this disability in an earlier year. Otherwise, provide the required disability statement.

The supplied text does not give a mailing address or e-filing instructions.

Common mistakes

• Including income already exempt from Wisconsin tax. Line 1 must exclude those amounts from the disability pay included in federal adjusted gross income.
• Entering negative amounts where zero is required. Enter zero on line 5c if line 5b exceeds line 5a, and on line 6 if line 5c exceeds line 4.
• Skipping the part-year calculation. Part-year residents must complete lines 7 and 8.
• Missing the disability statement requirement. If you have not filed a physician’s statement for this disability in an earlier year, you must provide a statement. If both spouses take the exclusion, each must meet the statement requirement.
• Overlooking the age rule. A person born on January 1, 1959, is considered age 65 at the end of 2024 and cannot take the 2024 exclusion.

Questions people ask

What counts as disability income?

Generally, it is pay under your employer’s accident and health plan or pension plan instead of wages while you were absent from work because of permanent and total disability. Payments from a plan that does not provide for disability retirement do not count.

What does permanent and total disability mean?

You cannot engage in substantial gainful activity because of a physical or mental condition. A physician must determine that the condition has lasted, or is expected to last, continuously for at least a year, or is expected to result in death.

How much can I exclude?

The weekly limit is your actual weekly disability pay or $100, whichever is less. Generally, the maximum exclusion per person is $5,200. The exclusion decreases dollar for dollar by the amount on line 5a above $15,000. Generally, no exclusion remains when line 5a is $20,200 or more for one eligible person, or $25,400 or more if both spouses qualify.

When does eligibility for the exclusion end?

It ends on the earlier of the first day of the tax year in which you turn 65 or the day you reach the age when your employer’s retirement program would have required you to retire.

Official sources

• https://www.revenue.wi.gov/TaxForms2024/2024-Schedule2440W.pdf