AB43,,3458 71.05 (6) (b) 4m. For taxable years beginning after December 31, 2022, disability payments other than disability payments that are paid from a retirement plan, the payments from which are exempt under subds. 54. and 54m. and sub. (1) (am) and (an), if the individual is under 65 years of age before the close of the taxable year to which the subtraction relates, retired on disability, and, when the individual retired, was permanently and totally disabled. In this subdivision, “permanently and totally disabled” means an individual who is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. An individual shall not be considered permanently and totally disabled for purposes of this subdivision unless proof is furnished in such form and manner, and at such times, as prescribed by the department. The exclusion under this subdivision shall be determined as follows:

AB43,,3459 a. If the individual is single or files as a head of household and the individual’s federal adjusted gross income in the year to which the subtraction relates is less than $30,000, the maximum subtraction is $5,500 or the amount of disability pay reported as income, whichever is less.

AB43,,3460 b. If the individual is married and is a joint filer and the couple’s federal adjusted gross income in the year to which the subtraction relates is less than $60,000, the maximum subtraction is $5,500 per spouse that is disabled or the amount of disability pay reported as income, whichever is less.

AB43,,3461 c. If the individual is married and files a separate return and the sum of both spouses’ federal adjusted gross income in the year to which the subtraction relates is less than $60,000, the maximum subtraction is $5,500 or the amount of disability pay reported as income, whichever is less.

****Note: This is reconciled s. 71.05 (6) (b) 4m. This Section has been affected by drafts with the following LRB numbers: -1235/P1 and -1234/P1.

AB43,1374 Section 1374. 71.05 (6) (b) 9. of the statutes is renumbered 71.05 (6) (b) 9. (intro.) and amended to read:

AB43,,3463 71.05 (6) (b) 9. (intro.) On assets held more than one year and on all assets acquired from a decedent, 30 percent of the capital gain as computed under the internal revenue code Internal Revenue Code, not including capital gains for which the federal tax treatment is determined under section 406 of P.L. 99-514; not including amounts treated as ordinary income for federal income tax purposes because of the recapture of depreciation or any other reason; and not including amounts treated as capital gain for federal income tax purposes from the sale or exchange of a lottery prize. For purposes of this subdivision, the capital gains and capital losses for all assets shall be netted before application of the percentage. For taxable years beginning after December 31, 2022, no subtraction may be made under this subdivision by an individual whose federal adjusted gross income in the taxable year exceeds the applicable threshold amount, except that an individual whose federal adjusted gross income, less 30 percent of the capital gains otherwise eligible for subtraction under this subdivision, is below the applicable threshold amount may make the subtraction reduced by the amount that the individual’s federal adjusted gross income exceeds the applicable threshold amount. In this subdivision, “applicable threshold amount” means:

AB43,1375 Section 1375. 71.05 (6) (b) 9. a. of the statutes is created to read:

AB43,,3465 71.05 (6) (b) 9. a. For an estate, a trust, a single individual, or an individual who files as a head of household, $400,000.

AB43,1376 Section 1376. 71.05 (6) (b) 9. b. of the statutes is created to read:

AB43,,3467 71.05 (6) (b) 9. b. For a married couple who files a joint return, $533,000.

AB43,1377 Section 1377. 71.05 (6) (b) 9. c. of the statutes is created to read:

AB43,,3469 71.05 (6) (b) 9. c. For a married individual who files a separate return, $266,500.

AB43,1378 Section 1378. 71.05 (6) (b) 49. a. of the statutes is amended to read:

AB43,,3471 71.05 (6) (b) 49. a. Subject to the definitions provided in subd. 49. b. to g. and the limitations specified in subd. 49. h. to j. for taxable years beginning after December 31, 2013, and subject to the limitation in subd. 49. k. for taxable years beginning after December 31, 2017, and subject to the limitation in subd. 49. m. for taxable years beginning after December 31, 2022, tuition expenses that are paid by a claimant for tuition for a pupil to attend an eligible institution.

AB43,1379 Section 1379. 71.05 (6) (b) 49. m. of the statutes is created to read:

AB43,,3473 71.05 (6) (b) 49. m. For taxable years beginning after December 31, 2022, no modification may be made under this subdivision unless the adjusted gross income of the claimant is less than $100,000 if the claimant is filing as single or head of household, $150,000 if the claimant is married and filing jointly, or $75,000 if the claimant is married and filing separately.

AB43,1380 Section 1380. 71.05 (6) (b) 54. (intro.) of the statutes is amended to read:

AB43,,3475 71.05 (6) (b) 54. (intro.) Except for a payment that is exempt under sub. (1) (a), (am), or (an), or that is exempt as a railroad retirement benefit, for taxable years beginning after December 31, 2020, and before January 1, 2023, up to $5,000 of payments or distributions received each year by an individual from a qualified retirement plan under the Internal Revenue Code or from an individual retirement account established under 26 USC 408, if all of the following conditions apply:

AB43,1381 Section 1381. 71.05 (6) (b) 54m. of the statutes is created to read:

AB43,,3477 71.05 (6) (b) 54m. Except for a payment that is exempt under sub. (1) (a), (am), or (an), or that is exempt as a railroad retirement benefit, for taxable years beginning after December 31, 2022, up to $5,500 of payments or distributions received each year by an individual from a qualified retirement plan under the Internal Revenue Code or from an individual retirement account established under 26 USC 408, if all of the following conditions apply:

AB43,,3478 a. The individual is at least 65 years of age before the close of the taxable year to which the exemption claim relates.

AB43,,3479 b. If the individual is single or files as head of household, his or her federal adjusted gross income in the year to which the exemption claim relates is less than $30,000.

AB43,,3480 c. If the individual is married and is a joint filer, the couple’s federal adjusted gross income in the year to which the exemption claim relates is less than $60,000.

AB43,,3481 d. If the individual is married and files a separate return, the sum of both spouses’ federal adjusted gross income in the year to which the exemption claim relates is less than $60,000.

AB43,1382 Section 1382. 71.05 (6) (b) 57. of the statutes is created to read:

AB43,,3483 71.05 (6) (b) 57. For each account an account holder, as defined in s. 71.10 (10) (a) 1., creates under s. 71.10 (10) (b) 1., and subject to s. 71.10 (10) (d), the amount deposited, limited to $5,000, by the account holder into the account during the taxable year and any interest, dividends, and other gains that accrue in the account and are redeposited into it. If the account holder is married and files a joint return, the $5,000 limitation shall be increased to $10,000. The subtraction under this subdivision does not apply to the transfer of funds from another account as described in s. 71.10 (10) (c) 4.

AB43,1383 Section 1383. 71.05 (8) (a) of the statutes is amended to read:

AB43,,3485 71.05 (8) (a) The carry back of losses to reduce income of prior years may be permitted for 2 taxable years. There shall be added any amount deducted as a federal net operating loss carry-back or carry-over and there shall be subtracted for the first taxable year for which the subtraction may be made any Wisconsin net operating loss carry-back or carry-forward allowable under par. (b) in an amount not in excess of the Wisconsin taxable income computed before the deduction of the Wisconsin net operating loss carry-back or carry-forward.