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2023 - 2024 LEGISLATURE
SENATE AMENDMENT 2,
TO ASSEMBLY BILL 438
November 14, 2023 - Offered by Senator Nass.
AB438-SA2,1,11 At the locations indicated, amend the bill as follows:
AB438-SA2,1,2 21. Page 9, line 14: before that line insert:
AB438-SA2,1,3 3 Section 3n. 71.05 (1) (am) of the statutes is amended to read:
AB438-SA2,1,64 71.05 (1) (am) Military retirement systems. All retirement payments received
5from the U.S. military employee retirement system, to the extent that such payments
6are not exempt under par. (a) or sub. (6) (b) 54.
AB438-SA2,3o 7Section 3o. 71.05 (1) (an) of the statutes is amended to read:
AB438-SA2,1,128 71.05 (1) (an) Uniformed services retirement benefits. All retirement payments
9received from the U.S. government that relate to service with the coast guard, the
10commissioned corps of the national oceanic and atmospheric administration, or the
11commissioned corps of the public health service, to the extent that such payments are
12not exempt under par. (a) or (am) or sub. (6) (b) 54.
AB438-SA2,3p 13Section 3p. 71.05 (6) (b) 4. (intro.) of the statutes is amended to read:
AB438-SA2,2,13
171.05 (6) (b) 4. (intro.) Disability payments other than disability payments that
2are paid from a retirement plan, the payments from which are exempt under subd.
354. and sub. (1) (am) and (an), if the individual either is single or is married and files
4a joint return and is under 65 years of age before the close of the taxable year to which
5the subtraction relates, retired on disability, and, when the individual retired, was
6permanently and totally disabled. In this subdivision, “permanently and totally
7disabled" means an individual who is unable to engage in any substantial gainful
8activity by reason of any medically determinable physical or mental impairment that
9can be expected to result in death or which has lasted or can be expected to last for
10a continuous period of not less than 12 months. An individual shall not be considered
11permanently and totally disabled for purposes of this subdivision unless proof is
12furnished in such form and manner, and at such times, as prescribed by the
13department. The exclusion under this subdivision shall be determined as follows:
AB438-SA2,3q 14Section 3q. 71.05 (6) (b) 54. (intro.) of the statutes is amended to read:
AB438-SA2,2,2115 71.05 (6) (b) 54. (intro.) Except for a payment that is exempt under sub. (1) (a),
16(am), or (an), or that is exempt as a railroad retirement benefit, and except as
17provided under subds. 54m. and 54mn.,
for taxable years beginning after December
1831, 2020, up to $5,000 of payments or distributions received each year by an
19individual from a qualified retirement plan under the Internal Revenue Code or from
20an individual retirement account established under 26 USC 408, if all of the
21following conditions apply:
AB438-SA2,3r 22Section 3r. 71.05 (6) (b) 54m. of the statutes is created to read:
AB438-SA2,3,423 71.05 (6) (b) 54m. a. Except for a payment that is exempt under sub. (1) (a),
24(am), or (an), or that is exempt as a railroad retirement benefit, and except as
25provided under subd. 54mn., for taxable years beginning after December 31, 2022,

1the amount, up to the limit specified in subd. 54m. b., c., or d., whichever is
2applicable, of the payments or distributions received each year from a qualified
3retirement plan under the Internal Revenue Code or from an individual retirement
4account established under 26 USC 408.
AB438-SA2,3,75 b. If the individual is at least 67 years of age before the close of the taxable year
6to which the subtraction relates, the amount claimed by the individual under this
7subdivision may not exceed $100,000 for that taxable year.
AB438-SA2,3,118 c. If the individual is married and is a joint filer, and both spouses are at least
967 years of age before the close of the taxable year to which the subtraction relates,
10the total amount claimed by the spouses under this subdivision may not exceed
11$150,000 for that taxable year.
AB438-SA2,3,1512 d. If the individual is married and files a separate return and is at least 67 years
13of age before the close of the taxable year to which the subtraction relates, the
14amount claimed by each spouse as a subtraction under this subdivision may not
15exceed $75,000 for that taxable year.
AB438-SA2,3,1816 e. The individual has not claimed any credit listed under s. 71.10 (4) for the
17same taxable year for which the individual claimed the subtraction under this
18subdivision.
AB438-SA2,3s 19Section 3s. 71.05 (6) (b) 54mn. of the statutes is created to read:
AB438-SA2,4,220 71.05 (6) (b) 54mn. For taxable years beginning after December 31, 2022, for
21an individual who is a part-year resident of this state, the amount that is calculated
22by multiplying the applicable amount under subd. 54m. b., c., or d. by a fraction the
23numerator of which is the individual's wages, salary, tips, unearned income, and net
24earnings from a trade or business that are taxable by this state and the denominator
25of which is the individual's total wages, salary, tips, unearned income, and net

1earnings from a trade or business. A nonresident of this state is not eligible to claim
2the subtraction under subd. 54m.
AB438-SA2,3t 3Section 3t. 71.06 (1q) (c) of the statutes is amended to read:
AB438-SA2,4,74 71.06 (1q) (c) On all taxable income exceeding $15,000 but not exceeding
5$225,000, 6.27 percent, except that for taxable years beginning after December 31,
62020, and before January 1, 2023, 5.30 percent , and for taxable years beginning after
7December 31, 2022, 4.40 percent
.
AB438-SA2,3u 8Section 3u. 71.06 (2) (i) 3. of the statutes is amended to read:
AB438-SA2,4,129 71.06 (2) (i) 3. On all taxable income exceeding $20,000 but not exceeding
10$300,000, 6.27 percent, except that for taxable years beginning after December 31,
112020, and before January 1, 2023, 5.30 percent , and for taxable years beginning after
12December 31, 2022, 4.40 percent
.
AB438-SA2,3v 13Section 3v. 71.06 (2) (j) 3. of the statutes is amended to read:
AB438-SA2,4,1714 71.06 (2) (j) 3. On all taxable income exceeding $10,000 but not exceeding
15$150,000, 6.27 percent, except that for taxable years beginning after December 31,
162020, and before January 1, 2023, 5.30 percent , and for taxable years beginning after
17December 31, 2022, 4.40 percent
.
AB438-SA2,3w 18Section 3w. 71.83 (1) (a) 6. of the statutes is amended to read:
AB438-SA2,5,219 71.83 (1) (a) 6. `Retirement plans.' Any natural person who is liable for a
20penalty for federal income tax purposes under section 72 (m) (5), (q), (t), and (v), 4973,
214974, 4975, or 4980A of the Internal Revenue Code is liable for 33 percent of the
22federal penalty unless the income received is exempt from taxation under s. 71.05
23(1) (a) or (6) (b) 54., 54m., or 54mn. The penalties provided under this subdivision

1shall be assessed, levied, and collected in the same manner as income or franchise
2taxes.”.
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