Well compensation grant program FAQ

The well compensation grant program provides funding to eligible landowners or renters to replace, reconstruct, or treat contaminated private water supplies that serve a residence or provide water to livestock. Learn more about eligibility at well compensation grants.

1. Where do I find my Wisconsin income on my Wisconsin income tax return?
2. Is the grant award I receive taxable income by the IRS?
3. How much money can I get?
4. What costs am I responsible for?

Where do I find my Wisconsin income on my Wisconsin income tax return?

To find the income line on your Wisconsin Income Tax Return look for the line that reads “this is your Wisconsin income.” This is the total that determines if you are eligible to apply for a well compensation grant. There will be a reduction in your reimbursement for all income over $45,000 as well. See details on the Special Funding tab.

Is the grant award I receive taxable income by the IRS?

Yes, the grant amount you receive is considered taxable income by the IRS and must be reported as income. For income tax filing purposes, awards to individuals are considered “other income” by the Department of Internal Revenue Service (IRS). The Department of Natural Resources is required by the IRS to send a 1099G for tax filing purposes as a result of payment for this grant award claim.

If the claimant is concerned with how the receipt of the payment might affect their standing to receive food stamps, Medicare, or other such services or programs, the claimant may wish to check with a representative of that program, social worker or other such people. Additional information regarding income tax issues can be obtained at www.irs.gov or the IRS hotline 1-800-829-1040.

How much money can I get?

The Well Compensation Grant Program provides funding to pay for 75% of up to $16,000 in eligible costs, which means the maximum possible grant award is $12,000. If the total eligible cost of replacing your contaminated well is $10,000, your grant amount would be $7,500. If total eligible replacement costs exceed $16,000, the maximum grant amount will still be $12,000.

Note: you are responsible for paying a minimum of $250 and any costs not covered by the grant. If you receive funding from any other private sources to cover some or all of the replacement water supply, your grant may be reduced if the total of the Well Compensation Grant and other grant exceed 100% of the eligible costs.

Family income may not exceed $65,000 for the prior calendar year. An income reduction of 30% is applied for each dollar over $45,000 in income. See example calculation below:

Amount of family income the previous tax year =	$55,000
Difference between last year’s family income and the income reduction amount for this program =	$55,000 - $45,000 = $10,000
Amount above the income reduction amount times adjustment parameter = reimbursement reduction	$10,000 x 0.3 = $3,000
Conclusion:
Maximum reimbursement under this program =	$12,000
Reduction because of higher income (from calculation above) =	$3,000
Amount of reimbursement check =	$9,000

What costs am I responsible for?

Since you will enter into a contract with well driller or licenses pump installer for their services, you are responsible to pay 100% of those costs. A Well Compensation grant from the DNR will not cover 100% of these costs. To ensure that well driller is paid, it is DNR practice to mail your grant payment check to the well driller or licensed pump installer, unless you provide the DNR with an invoice marked “paid in full” and signed and dated by the well driller or licenses pump installer at the time you submit reimbursement request form.