AB68: Bill Text

AB68,862,6 a. The individual is at least 18 years of age during the taxable year to which the claim relates.

AB68,862,8 b. The individual requires assistance with one or more daily living activities, as certified in writing by a physician.

AB68,862,9 c. The individual is the claimant's family member, as defined in s. 46.2805 (6m).

AB68,862,13 (b) Filing claims. For taxable years beginning after December 31, 2020, and subject to the limitations provided in this subsection, a claimant may claim as a credit against the tax imposed under s. 71.02, up to the amount of those taxes, 50 percent of the claimant's qualified expenses.

AB68,862,21 (c) Limitations. 1. Subject to subds. 2. and 3., the maximum credit that may be claimed under this subsection each taxable year with regard to a particular qualified family member is $500 or, if a claimant is married and filing a separate return, $250. If more than one individual may file a claim under this subsection for a particular qualified family member, the maximum credit specified in this subdivision shall be apportioned among all eligible claimants based on the ratio of their qualified expenses to the total amount of all qualified expenses incurred on behalf of that particular qualified family member, as determined by the department.

AB68,863,2 2. If the claimant is married and filing jointly and the couple's federal adjusted gross income in the taxable year exceeds $170,000, no credit may be claimed under this subsection. If the claimant is married and filing jointly and the couple's federal adjusted gross income in the taxable year exceeds $150,000, but does not exceed $170,000, the credit claimed under this subsection may not exceed the amount determined as follows:

AB68,863,4 a. Determine the amount allowed under par. (b) without regard to this subdivision but with regard to subd. 1.

AB68,863,5 b. Subtract $150,000 from the couple's federal adjusted gross income.

AB68,863,6 c. Divide the amount determined under subd. 2. b. by $20,000.

AB68,863,8 d. Multiple the amount determined under subd. 2. a. by the amount determined under subd. 2. c.

AB68,863,10 e. Subtract the amount determined under subd. 2. d. from the amount determined under subd. 2. a.

AB68,863,17 3. If the claimant files as a single individual or head of household, or is married and files separately, and the claimant's federal adjusted gross income in the taxable year exceeds $85,000, no credit may be claimed under this subsection. If the claimant files as a single individual or head of household, or is married and files separately, and the claimant's federal adjusted gross income in the taxable year exceeds $75,000, but does not exceed $85,000, the credit claimed under this subsection may not exceed the amount determined as follows:

AB68,863,19 a. Determine the amount allowed under par. (b) without regard to this subdivision but with regard to subd. 1.

AB68,863,20 b. Subtract $75,000 from the claimant's federal adjusted gross income.

AB68,863,21 c. Divide the amount determined under subd. 3. b. by $10,000.

AB68,863,23 d. Multiple the amount determined under subd. 3. a. by the amount determined under subd. 3. c.

AB68,863,25 e. Subtract the amount determined under subd. 3. d. from the amount determined under subd. 3. a.

AB68,864,2 4. No credit may be allowed under this subsection unless it is claimed within the period specified under s. 71.75 (2).

AB68,864,4 5. No credit may be claimed under this subsection by nonresidents or part-year residents of this state.

AB68,864,5 6. Qualified expenses may not include any of the following:

AB68,864,6 a. General food, clothing, or transportation expenses.

AB68,864,8 b. Ordinary household maintenance or repair expenses that are not directly related or necessary for the care of the qualified family member.

AB68,864,9 c. Any amount that is paid or reimbursed by insurance or other means.

AB68,864,12 7. No credit may be allowed under this subsection for a taxable year covering a period of less than 12 months, except for a taxable year closed by reason of the death of the taxpayer.

AB68,864,14 (d) Administration. Subsection (9e) (d), to the extent that it applies to the credit under that subsection, applies to the credit under this subsection.

AB68,1308 Section 1308. 71.07 (9e) (aj) (intro.) of the statutes is amended to read:

AB68,864,20 71.07 (9e) (aj) (intro.) For taxable years beginning after December 31, 2010, and before January 1, 2021, an individual may credit against the tax imposed under s. 71.02 an amount equal to one of the following percentages of the federal basic earned income credit for which the person is eligible for the taxable year under section 32 (b) (1) (A) to (C) of the Internal Revenue Code:

AB68,1309 Section 1309. 71.07 (9e) (ak) of the statutes is created to read:

AB68,865,2 71.07 (9e) (ak) For taxable years beginning after December 31, 2020, an individual may credit against the tax imposed under s. 71.02 an amount equal to one of the following percentages of the federal basic earned income credit for which the individual is eligible for the taxable year under section 32 (b) (1) of the Internal Revenue Code:

AB68,865,4 1. If the individual has one qualifying child who has the same principal place of abode as the individual, 16 percent.

AB68,865,6 2. If the individual has 2 qualifying children who have the same principal place of abode as the individual, 25 percent.

AB68,865,8 3. If the individual has 3 or more qualifying children who have the same principal place of abode as the individual, 34 percent.

AB68,1310 Section 1310 . 71.07 (9e) (b) of the statutes is amended to read:

AB68,865,13 71.07 (9e) (b) No credit may be allowed under this subsection to married persons, except married persons living apart who are treated as single under section 7703 (b) of the internal revenue code Internal Revenue Code, if the husband and wife spouses report their income on separate income tax returns for the taxable year.

AB68,1311 Section 1311 . 71.07 (9g) of the statutes is created to read:

AB68,865,16 71.07 (9g) Additional child and dependent care tax credit. (a) Definitions. In this subsection:

AB68,865,19 1. “Claimant" means an individual who is eligible for and claims the federal child and dependent care tax credit for the taxable year to which the claim under this subsection relates.

AB68,865,21 2. “Federal child and dependent care tax credit” means the tax credit under 26 USC section 21.

AB68,866,2 (b) Filing claims. Subject to the limitations provided in this subsection, a claimant may claim as a credit against the tax imposed under s. 71.02, up to the amount of those taxes, an amount equal to 50 percent of the federal child and dependent care tax credit claimed by the claimant on his or her federal income tax return for the taxable year to which the claim under this subsection relates.

AB68,866,4 (c) Limitations. 1. No credit may be allowed under this subsection unless it is claimed within the period under s. 71.75 (2).

AB68,866,7 2. No credit may be allowed under this subsection for a taxable year covering a period of less than 12 months, except for a taxable year closed by reason of the death of the claimant.

AB68,866,9 3. The credit under this subsection may not be claimed by a part-year resident or a nonresident of this state.

AB68,866,11 4. A claimant who claims the credit under this subsection is subject to the special rules in 26 USC 21 (e) (2) and (4).

AB68,866,13 (d) Administration. Subsection (9e) (d), to the extent that it applies to the credit under that subsection, applies to the credit under this subsection.

AB68,1312 Section 1312 . 71.09 (13) (a) 2. of the statutes is amended to read:

AB68,866,22 71.09 (13) (a) 2. The tax shown on the return for the preceding year. If a husband and wife spouses who filed separate returns for the preceding taxable year file a joint return, the tax shown on the return for the preceding year is the sum of the taxes shown on the separate returns of the husband and wife spouses. If a husband and wife spouses who filed a joint return for the preceding taxable year file separate returns, the tax shown on the return for the preceding year is the husband's or wife's each spouse's proportion of that tax based on what their respective tax liabilities for that year would have been had they filed separately.

AB68,1313 Section 1313 . 71.10 (4) (cs) of the statutes is created to read:

AB68,866,24 71.10 (4) (cs) Additional child and dependent care tax credit under s. 71.07 (9g).

AB68,1314 Section 1314 . 71.10 (4) (ct) of the statutes is created to read:

AB68,867,1 71.10 (4) (ct) Work opportunity tax credit under s. 71.07 (4t).

AB68,1315 Section 1315 . 71.10 (4) (ha) of the statutes is created to read:

AB68,867,3 71.10 (4) (ha) Flood insurance premiums credit under s. 71.07 (8m).

AB68,1316 Section 1316 . 71.10 (4) (hd) of the statutes is created to read:

AB68,867,5 71.10 (4) (hd) Family caregiver tax credit under s. 71.07 (8p).

AB68,1317 Section 1317 . 71.10 (4) (k) of the statutes is created to read:

AB68,867,7 71.10 (4) (k) Any amount computed under s. 71.83 (1) (ch).

AB68,1318 Section 1318 . 71.10 (10) of the statutes is created to read:

AB68,867,10 71.10 (10) First-time homebuyer savings accounts. (a) Definitions. In this subsection:

AB68,867,12 1. “Account holder” means an individual who creates, individually or jointly with his or her spouse, an account under par. (b) 1.

AB68,867,14 2. “Allowable closing costs” means disbursements listed in a settlement statement for the purchase of a single-family residence by a beneficiary.

AB68,867,16 3. “Beneficiary" means a first-time homebuyer who is designated by an account holder as the beneficiary of an account created under par. (b) 1.

AB68,867,18 4. “Eligible costs” means the down payment and allowable closing costs for the purchase of a single-family residence in this state by a beneficiary.

AB68,867,23 5. “Financial institution" means a bank, trust company, savings institution, savings bank, savings and loan association, industrial loan association, consumer finance company, credit union, or a benefit association, insurance company, safe deposit company, money market mutual fund, or similar entity authorized to do business in this state.

AB68,868,2 6. “First-time homebuyer” means an individual who resides in this state and did not have, either individually or jointly, a present ownership interest in a single-family residence during the 36 months before the month in which the individual purchases a single-family residence in this state.

AB68,868,5 7. “Single-family residence” means a residence intended for occupation by a single family unit that is purchased by a beneficiary for use as his or her principal residence.

AB68,868,14 (b) Creation of account. 1. An individual may create an account and become the account holder by opening an account at a financial institution for the purpose of paying or reimbursing the eligible costs of a first-time homebuyer. The account holder shall designate a beneficiary when the account is created and may designate himself or herself as the beneficiary. An account may have only one beneficiary at any one time. An individual may be the beneficiary of more than one account, and an individual may be the account holder of more than one account, but an account holder may not have more than one account that designates the same beneficiary. The account holder may change the beneficiary at any time.

AB68,868,16 2. An individual may jointly own an account created under subd. 1 with his or her spouse.

AB68,868,18 3. Only cash and marketable securities may be contributed to an account created under subd. 1.

AB68,868,21 4. Persons other than an account holder may contribute to an account created under subd. 1, but the subtraction under s. 71.05 (6) (b) 55. may be made only by the account holder.

AB68,868,25 (c) Account holder rights and responsibilities. 1. An account holder may withdraw funds from an account created under par. (b) 1. to pay eligible costs for the benefit of the beneficiary or to reimburse the beneficiary for eligible costs the beneficiary incurs and has paid.

AB68,869,3 2. An account holder may not use funds in an account created under par. (b) 1. to pay any expenses he or she incurs in administering the account, although a financial institution may deduct a service fee from the account.

AB68,869,7 3. Annually, an account holder shall submit to the department with his or her income tax return, on forms prepared by the department, information regarding the account created under par. (b) 1. The information submitted shall include all of the following:

AB68,869,9 a. A list of transactions in the account during the taxable year to which the return relates, including the beginning and ending balances of the account.

AB68,869,10 b. The 1099 form issued by the financial institution that relates to the account.

AB68,869,12 c. A list of eligible costs, and other costs, for which funds from the account were withdrawn during the taxable year to which the return relates.

AB68,869,17 4. An account holder may withdraw funds from an account created under par. (b) 1. with no penalty due under s. 71.83 (1) (ch) and no responsibility to make an addition under s. 71.05 (6) (a) 30. if he or she immediately transfers the funds to a different financial institution and deposits the funds into an account created under par. (b) 1. at that financial institution.

AB68,869,20 (d) Limitations on accounts, dissolution. 1. An account holder may not claim a subtraction under s. 71.05 (6) (b) 55. for more than a total of $50,000 of deposits into any account created under par. (b) 1. for each beneficiary.

AB68,869,23 2. An account holder shall dissolve an account created under par. (b) 1. no later than 120 months after it is created. The financial institution shall distribute any funds in the account at dissolution to the account holder.

AB68,870,3 3. If an account holder dies while funds remain in an account created under par. (b) 1., the account shall be dissolved and the financial institution shall distribute the funds to the account holder's estate.

AB68,870,4 (e) Department responsibilities. The department shall:

AB68,870,7 1. Prepare and distribute any forms that an account holder is required to submit under par. (c) 3. and any other forms necessary to administer this subsection and the adjustments to income under s. 71.05 (6) (a) 30. and (b) 55.

AB68,870,9 2. Prepare and distribute to financial institutions and potential homebuyers informational materials about the accounts described in this subsection.

AB68,1319 Section 1319. 71.26 (3) (j) of the statutes is amended to read:

AB68,870,19 71.26 (3) (j) Sections 243, 244, 245, 245A, 246 and 246A are excluded and replaced by the rule that corporations may deduct from income dividends received from a corporation with respect to its common stock if the corporation receiving the dividends owns, directly or indirectly, during the entire taxable year at least 70 percent of the total combined voting stock of the payor corporation. In this paragraph, “dividends received" means gross dividends minus taxes on those dividends paid to a foreign nation and claimed as a deduction under this chapter. The same dividends may not be deducted more than once and may not be used in the determination of a net business loss under ss. 71.26 (4) and 71.45 (4).

AB68,1320 Section 1320. 71.26 (4) (a) of the statutes is amended to read:

AB68,871,13 71.26 (4) (a) Except as provided in par. (b) and s. 71.80 (25), a corporation, except a tax-option corporation or an insurer to which s. 71.45 (4) applies, may offset against its Wisconsin net business income any Wisconsin net business loss incurred in any of the 20 immediately preceding taxable years, if the corporation was subject to taxation under this chapter in the taxable year in which the loss was incurred, to the extent not offset by other items of Wisconsin income in the loss year and by Wisconsin net business income of any year between the loss year and the taxable year for which an offset is claimed. For purposes of this subsection, Wisconsin net business income or loss shall consist of all the income attributable to the operation of a trade or business in this state, less the business expenses allowed as deductions in computing net income, except that the dividends received deduction under sub. (3) (j) may not be used in the determination of a net business loss. The Wisconsin net business income or loss of corporations engaged in business within and without the state shall be determined under s. 71.25 (6) and (10) to (12). Nonapportionable losses having a Wisconsin situs under s. 71.25 (5) (b) shall be included in Wisconsin net business loss; and nonapportionable income having a Wisconsin situs under s. 71.25 (5) (b), whether taxable or exempt, shall be included in other items of Wisconsin income and Wisconsin net business income for purposes of this subsection.

AB68,1321 Section 1321. 71.28 (3q) (c) 1. of the statutes is renumbered 71.28 (3q) (c) 1. a. and amended to read:

AB68,871,24 71.28 (3q) (c) 1. a. Partnerships Except as provided in subd. 1. b., partnerships, limited liability companies, and tax-option corporations may not claim the credit under this subsection, but the eligibility for, and the amount of, the credit are based on their payment of amounts under par. (b). A partnership, limited liability company, or tax-option corporation shall compute the amount of credit that each of its partners, members, or shareholders may claim and shall provide that information to each of them. Partners, members of limited liability companies, and shareholders of tax-option corporations may claim the credit in proportion to their ownership interests.

AB68,1322 Section 1322. 71.28 (3q) (c) 1. b. of the statutes is created to read: