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LRBs0398/1
MES:ahe&wlj
2015 - 2016 LEGISLATURE
SENATE SUBSTITUTE AMENDMENT 1,
TO SENATE BILL 622
March 2, 2016 - Offered by Senators Hansen and Bewley.
SB622-SSA1,1,3 1An Act to amend 71.05 (6) (b) 28. (intro.), am. and h.; and to create 71.05 (6)
2(b) 28. j. of the statutes; relating to: the individual income tax subtract
3modification for tuition and student fees.
Analysis by the Legislative Reference Bureau
This substitute amendment sunsets the phase-out provisions for the
individual income tax deduction for certain higher education costs, and it expands
the definition of tuition expenses to include any amount paid by a claimant in the
year to which the claim relates on a student loan, the proceeds of which were used
by the claimant to pay the claimant's expenses for tuition, fees, books, room and
board, and educational supplies that were directly related to the claimant's
attendance at an eligible institution. The substitute amendment defines eligible
institution as a regionally accredited, nonprofit, postsecondary educational
institution.
Currently, there is an individual income tax subtraction for amounts paid by a
claimant for tuition expenses and mandatory student fees for a student who is the
claimant or the claimant's dependent under the Internal Revenue Code, to attend an
institution of higher education that is approved by the Educational Approval Board
and that is located in Wisconsin, or to attend certain postsecondary schools in
Minnesota to which the Minnesota-Wisconsin reciprocity agreement applies. The
tuition expenses and fees for which a subtraction may be claimed are calculated
based on the amount of tuition charged by the UW System at four-year institutions.

Also under current law, the subtraction that a claimant may claim for such
tuition expenses and mandatory student fees is reduced as the claimant's annual
federal adjusted gross income (FAGI) increases until, at a certain point, no
subtraction may be claimed. Currently, the allowable subtraction phases out, for a
single person or a married person filing as a head of household, as the claimant's
FAGI increases from $50,000 to $60,000. Once such a claimant's FAGI exceeds
$60,000, he or she may not claim the subtraction. For a married person filing a joint
return, the phaseout occurs as the married couple's joint FAGI increases from
$80,000 to $100,000, and no subtraction is allowed once the married couple's joint
FAGI exceeds $100,000. The phaseout for a married person filing a separate return
occurs as the claimant's FAGI increases from $40,000 to $50,000, and no subtraction
is allowed once the claimant's FAGI exceeds $50,000.
Under this substitute amendment, the phase-out provisions do not apply to a
taxable year that begins after December 31, 2015.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB622-SSA1,1 1Section 1. 71.05 (6) (b) 28. (intro.), am. and h. of the statutes are amended to
2read:
SB622-SSA1,2,143 71.05 (6) (b) 28. (intro.) An amount paid by a claimant for tuition expenses,
4including any amount paid by a claimant in the year to which the claim relates on
5a loan, the proceeds of which were used by the claimant to pay the claimant's
6expenses for tuition, fees, books, room and board, and educational supplies that were
7directly related to the claimant's attendance at an eligible educational institution,
8as defined in s. 18.81 (2),
and mandatory student fees for a student who is the
9claimant or who is the claimant's child and the claimant's dependent who is claimed
10under section 151 (c) of the Internal Revenue Code, to attend any university, college,
11technical college or a school approved under s. 38.50, that is located in Wisconsin or
12to attend a public vocational school or public institution of higher education in
13Minnesota under the Minnesota-Wisconsin reciprocity agreement under s. 39.47,
14calculated as follows:
SB622-SSA1,3,17
1am. Notwithstanding subd. 28. a., for taxable years beginning after December
231, 2008, the department of revenue and the Board of Regents of the University of
3Wisconsin System shall continue making the calculation described under subd. 28.
4a. Notwithstanding subd. 28. a., once this calculation exceeds $6,000, the deduction
5for tuition expenses, including any amount paid by a claimant in the year to which
6the claim relates on a loan, the proceeds of which were used by the claimant to pay
7the claimant's expenses for tuition, fees, books, room and board, and educational
8supplies that were directly related to the claimant's attendance at an eligible
9educational institution, as defined in s. 18.81 (2),
and mandatory student fees, as
10described in subd. 28. (intro.), shall be based on an amount equal to not more than
11twice the average amount charged by the Board of Regents of the University of
12Wisconsin System at 4-year institutions for resident undergraduate academic fees
13for the most recent fall semester, as determined by the Board of Regents by
14September 1 of that semester, per student for each year to which the claim relates,
15and the deduction that may be claimed under this subd. 28. am. first applies to
16taxable years beginning on the January 1 after the calculation of the Board of
17Regents, that must occur by September 1, exceeds $6,000.
SB622-SSA1,4,418 h. No modification may be claimed under this subdivision for an amount paid
19for tuition expenses, including any amount paid by a claimant in the year to which
20the claim relates on a loan, the proceeds of which were used by the claimant to pay
21the claimant's expenses for tuition, fees, books, room and board, and educational
22supplies that were directly related to the claimant's attendance at an eligible
23educational institution, as defined in s. 18.81 (2),
and mandatory student fees, as
24described under this subdivision, if the source of the payment is an amount
25withdrawn from a college savings account, as described in s. 16.641 or from a college

1tuition and expenses program, as described in s. 16.64, and if the owner of the
2account or a parent, grandparent, great-grandparent, aunt, or uncle of the
3beneficiary, who contributed to the account, has claimed a deduction under subd. 32.
4or 33. that relates to such an amount.
SB622-SSA1,2 5Section 2. 71.05 (6) (b) 28. j. of the statutes is created to read:
SB622-SSA1,4,76 71.05 (6) (b) 28. j. The provisions of subd. 28. b., c., d., and g. do not apply to
7a taxable year that begins after December 31, 2015.
SB622-SSA1,3 8Section 3. Initial applicability.
SB622-SSA1,4,139 (1) Tuition expenses deduction. This act first applies to taxable years
10beginning on January 1 of the year in which this subsection takes effect, except that
11if this subsection takes effect after July 31 this act first applies to taxable years
12beginning on January 1 of the year following the year in which this subsection takes
13effect.
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