AB2,25 Section 25 . 71.05 (1) (an) of the statutes is amended to read:

AB2,15,9 71.05 (1) (an) Uniformed services retirement benefits. All retirement payments received from the U.S. government that relate to service with the coast guard, the commissioned corps of the national oceanic and atmospheric administration, or the commissioned corps of the public health service, to the extent that such payments are not exempt under par. (a), (ae), or (am) or sub. (6) (b) 54.

AB2,26 Section 26 . 71.05 (6) (b) 4. of the statutes is renumbered 71.05 (6) (b) 4. (intro.) and amended to read:

AB2,16,8 71.05 (6) (b) 4. (intro.) Disability payments other than disability payments that are paid from a retirement plan, the payments from which are exempt under sub. subs. (1) (ae), (am), and (an) and (6) (b) 54., if the individual either is single or is married and files a joint return, to the extent those payments are excludable under section 105 (d) of the Internal Revenue Code as it existed immediately prior to its repeal in 1983 by section 122 (b) of P.L. 98-21, except that if an individual is divorced during the taxable year that individual may subtract an amount only if that person is disabled and the amount that may be subtracted then is $100 for each week that payments are received or the amount of disability pay reported as income, whichever is less. If the exclusion under this subdivision is claimed on a joint return and only one of the spouses is disabled, the maximum exclusion is $100 for each week that payments are received or the amount of disability pay reported as income, whichever is less. and 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:

AB2,27 Section 27 . 71.05 (6) (b) 4. a. to c. of the statutes are created to read:

AB2,16,13 71.05 (6) (b) 4. a. If the individual is single and the individual's federal adjusted gross income in the year to which the subtraction relates is less than $20,200, the maximum subtraction is $100 for each week that payments are received or the amount of disability pay reported as income, whichever is less.

AB2,16,18 b. If the individual is married and filing a joint return and the couple's federal adjusted gross income in the year to which the subtraction relates is less than $20,200, or $25,400 if both spouses are disabled, the maximum subtraction is $100 for each week that payments are received, per spouse if both spouses are disabled, or the amount of disability pay reported as income, whichever is less.

AB2,16,23 c. If the federal adjusted gross income of the individual, or individuals if filing a joint return, for the taxable year, determined without regard to this subd. 4., exceeds $15,000, the amount subtracted under this subd. 4. for the taxable year shall be reduced by an amount equal to the excess of the federal adjusted gross income over $15,000.

AB2,28 Section 28 . 71.05 (6) (b) 17. and 18. of the statutes are repealed.

AB2,29 Section 29 . 71.05 (6) (b) 19. c. of the statutes is amended to read:

AB2,17,6 71.05 (6) (b) 19. c. For taxable years beginning before January 1, 2021, for a person who is a nonresident or a part-year resident of this state, modify the amount calculated under subd. 19. b. by multiplying the amount by a fraction the numerator of which is the person's net earnings from a trade or business that are taxable by this state and the denominator of which is the person's total net earnings from a trade or business.

AB2,30 Section 30 . 71.05 (6) (b) 19. cm. of the statutes is created to read:

AB2,17,20 71.05 (6) (b) 19. cm. For taxable years beginning after December 31, 2020, for a person who is a nonresident or a part-year resident of this state, modify the amount calculated under subd. 19. b. by multiplying the amount by a fraction the numerator of which is the person's wages, salary, tips, unearned income, and net earnings from a trade or business that are taxable by this state and the denominator of which is the person's total wages, salary, tips, unearned income, and net earnings from a trade or business. In this subd. 19. cm., for married persons filing separately “ wages, salary, tips, unearned income, and net earnings from a trade or business" means the separate wages, salary, tips, unearned income, and net earnings from a trade or business of each spouse, and for married persons filing jointly “wages, salary, tips, unearned income, and net earnings from a trade or business" means the total wages, salary, tips, unearned income, and net earnings from a trade or business of both spouses.

AB2,31 Section 31 . 71.05 (6) (b) 19. d. of the statutes is amended to read:

AB2,17,24 71.05 (6) (b) 19. d. Reduce For taxable years beginning before January 1, 2021, reduce the amount calculated under subd. 19. b. or c. to the person's aggregate net earnings from a trade or business that are taxable by this state.

AB2,32 Section 32 . 71.05 (6) (b) 19. dm. of the statutes is created to read:

AB2,18,4 71.05 (6) (b) 19. dm. For taxable years beginning after December 31, 2020, reduce the amount calculated under subd. 19. b. or cm. to the person's aggregate wages, salary, tips, unearned income, and net earnings from a trade or business that are taxable by this state.

AB2,33 Section 33 . 71.05 (6) (b) 20., 36., 37., 39., 40. and 41. of the statutes are repealed.

AB2,34 Section 34 . 71.05 (6) (b) 54. of the statutes is created to read:

AB2,18,13 71.05 (6) (b) 54. 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, 2019, 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:

AB2,18,15 a. The individual is at least 65 years of age before the close of the taxable year to which the exemption claim relates.

AB2,18,18 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 $15,000.

AB2,18,20 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 $30,000.

AB2,18,23 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 $30,000.

AB2,35 Section 35 . 71.07 (5) (a) 15. of the statutes is amended to read:

AB2,19,6 71.07 (5) (a) 15. The amount claimed as a deduction for medical care insurance under section 213 of the Internal Revenue Code that is exempt from taxation under s. 71.05 (6) (b) 17. to 20. 19., 35., 36., 37., 38., 39., 40., 41., and 42. and the amount claimed as a deduction for a long-term care insurance policy under section 213 (d) (1) (D) of the Internal Revenue Code, as defined in section 7702B (b) of the Internal Revenue Code that is exempt from taxation under s. 71.05 (6) (b) 26.

AB2,36 Section 36. 71.07 (9m) (h) of the statutes is amended to read:

AB2,19,19 71.07 (9m) (h) Any person, including a nonprofit entity described in section 501 (c) (3) of the Internal Revenue Code, may sell or otherwise transfer the credit under par. (a) 2m. or 3., in whole or in part, to another person who is subject to the taxes imposed under s. 71.02, 71.23, or 71.43, if the person notifies the department of the transfer, and submits with the notification a copy of the transfer documents, and the department certifies ownership of the credit with each transfer. The transferor may file a claim for more than one taxable year on a form prescribed by the department to compute all years of the credit under par. (a) 2m. or 3., at the time of the transfer request. The transferee may first use the credit to offset tax in the taxable year of the transferor in which the transfer occurs and may use the credit only to offset tax in taxable years otherwise allowed to be claimed and carried forward by the original claimant.

AB2,37 Section 37 . 71.22 (4) (c), (d), (e), (f), (g), (h) and (i) of the statutes are repealed.