Limitation for dependent who files return.

For taxable years beginning after December 31, 1997, in the case of a taxpayer with respect to whom an exemption under sub. (23) (b) 2. is allowable to another person, the Wisconsin standard deduction shall be the lesser of the amount under subd. 2m. or one of the amounts calculated under subd. 3m., whichever amount under subd. 3m. is greater.

The standard deduction that may be claimed by an individual under par. (dp), based on the individual’s filing status.

$500, as adjusted for inflation in the manner prescribed by sections 1 (f) (3) to (6) and 63 (c) (4) of the Internal Revenue Code or the taxpayer’s earned income, as defined in section 911 (d) (2) of the Internal Revenue Code, plus $250, as adjusted for inflation in the manner prescribed by sections 1 (f) (3) to (6) and 63 (c) (4) of the Internal Revenue Code.

The department shall incorporate the changes in this paragraph in the income tax forms and instructions.