Wisconsin 2023-2024 Regular Session

Wisconsin Assembly Bill AB384 Compare Versions

Only one version of the bill is available at this time.

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3	3	2023 - 2024 LEGISLATURE
4	4	2023 ASSEMBLY BILL 384
5	5	August 11, 2023 - Introduced by Representatives STEFFEN, MYERS, ALLEN,
6	6	ARMSTRONG, BEHNKE, BINSFELD, BRANDTJEN, DONOVAN, DUCHOW, EDMING,
7	7	GOEBEN, GREEN, GUNDRUM, GUSTAFSON, KITCHENS, MACCO, MAGNAFICI, MAXEY,
8	8	MURSAU, O'CONNOR, ORTIZ-VELEZ, ROZAR, SCHMIDT, SCHRAA, TITTL, WICHGERS,
9	9	WITTKE, MURPHY and RETTINGER, cosponsored by Senators CABRAL-GUEVARA,
10	10	WANGGAARD, TAYLOR and QUINN. Referred to Committee on Ways and Means.
11	11	*AUTHORS SUBJECT TO CHANGE*
12	12	AN ACT to amend 71.05 (1) (am), 71.05 (1) (an), 71.05 (6) (b) 4. (intro.), 71.05 (6)
13	13	(b) 54. (intro.) and 71.83 (1) (a) 6.; and to create 71.05 (6) (b) 54m. and 71.05
14	14	(6) (b) 54mn. of the statutes; relating to: an increase and expansion of the
15	15	retirement income subtraction.
16	16	Analysis by the Legislative Reference Bureau
17	17	This bill increases and expands the individual state income tax subtraction for
18	18	payments or distributions received from qualified retirement plans under the
19	19	Internal Revenue Code or from certain individual retirement accounts. Under the
20	20	bill, beginning in tax year 2024, up to $100,000 of payments or distributions received
21	21	from qualified retirement plans or certain individual retirement accounts may be
22	22	subtracted annually from an individual's taxable income, if the individual is at least
23	23	67 years of age. If the individual and individual's spouse are both at least 67 years
24	24	of age, the sum of the amount that the couple may subtract annually from their
25	25	combined taxable income may not exceed $150,000.
26	26	Under current law, up to $5,000 of payments or distributions received by
27	27	certain individuals from qualified retirement plans or from certain individual
28	28	retirement accounts may be subtracted. To be eligible, the individual must be at least
29	29	65 years old and have federal adjusted gross income under $15,000, or under $30,000
30	30	if married.
31	31	Because this bill relates to an exemption from state or local taxes, it may be
32	32	referred to the Joint Survey Committee on Tax Exemptions for a report to be printed
33	33	as an appendix to the bill.
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39	39	ASSEMBLY BILL 384
40	40	For further information see the state fiscal estimate, which will be printed as
41	41	an appendix to this bill.
42	42	The people of the state of Wisconsin, represented in senate and assembly, do
43	43	enact as follows:
44	44	SECTION 1. 71.05 (1) (am) of the statutes is amended to read:
45	45	71.05 (1) (am) Military retirement systems. All retirement payments received
46	46	from the U.S. military employee retirement system, to the extent that such payments
47	47	are not exempt under par. (a) or sub. (6) (b) 54., 54m., or 54mn.
48	48	SECTION 2. 71.05 (1) (an) of the statutes is amended to read:
49	49	71.05 (1) (an) Uniformed services retirement benefits. All retirement payments
50	50	received from the U.S. government that relate to service with the coast guard, the
51	51	commissioned corps of the national oceanic and atmospheric administration, or the
52	52	commissioned corps of the public health service, to the extent that such payments are
53	53	not exempt under par. (a) or (am) or sub. (6) (b) 54., 54m., or 54mn.
54	54	SECTION 3. 71.05 (6) (b) 4. (intro.) of the statutes is amended to read:
55	55	71.05 (6) (b) 4. (intro.) Disability payments other than disability payments that
56	56	are paid from a retirement plan, the payments from which are exempt under subd.
57	57	subds. 54., 54m., and 54mn. and sub. (1) (am) and (an), if the individual either is
58	58	single or is married and files a joint return and is under 65 years of age before the
59	59	close of the taxable year to which the subtraction relates, retired on disability, and,
60	60	when the individual retired, was permanently and totally disabled. In this
61	61	subdivision, “permanently and totally disabled" means an individual who is unable
62	62	to engage in any substantial gainful activity by reason of any medically determinable
63	63	physical or mental impairment that can be expected to result in death or which has
64	64	lasted or can be expected to last for a continuous period of not less than 12 months.
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88	88	SECTION 3
89	89	ASSEMBLY BILL 384
90	90	An individual shall not be considered permanently and totally disabled for purposes
91	91	of this subdivision unless proof is furnished in such form and manner, and at such
92	92	times, as prescribed by the department. The exclusion under this subdivision shall
93	93	be determined as follows:
94	94	SECTION 4. 71.05 (6) (b) 54. (intro.) of the statutes is amended to read:
95	95	71.05 (6) (b) 54. (intro.) Except for a payment that is exempt under sub. (1) (a),
96	96	(am), or (an), or that is exempt as a railroad retirement benefit, and except as
97	97	provided in subds. 54m. and 54mn., for taxable years beginning after December 31,
98	98	2020, up to $5,000 of payments or distributions received each year by an individual
99	99	from a qualified retirement plan under the Internal Revenue Code or from an
100	100	individual retirement account established under 26 USC 408, if all of the following
101	101	conditions apply:
102	102	SECTION 5. 71.05 (6) (b) 54m. of the statutes is created to read:
103	103	71.05 (6) (b) 54m. Except for a payment that is exempt under sub. (1) (a), (am),
104	104	or (an), or that is exempt as a railroad retirement benefit, and except as provided
105	105	under subd. 54mn., for taxable years beginning after December 31, 2023, the
106	106	amount, as specified in subd. 54m. b., c., or d., whichever is applicable, of the
107	107	payments or distributions received each year from a qualified retirement plan under
108	108	the Internal Revenue Code or from an individual retirement account established
109	109	under 26 USC 408, if all of the following conditions apply:
110	110	a. The individual is at least 67 years of age before the close of the taxable year
111	111	to which the subtraction relates.
112	112	b. If the individual is single or files as head of household, the amount claimed
113	113	by the individual under this subdivision may not exceed $100,000 for that taxable
114	114	year.
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141	141	SECTION 5 ASSEMBLY BILL 384
142	142	c. If the individual is married and is a joint filer, and both spouses are at least
143	143	67 years of age before the close of the taxable year to which the subtraction relates,
144	144	the amount claimed by the individual under this subdivision may not exceed
145	145	$150,000 for that taxable year.
146	146	d. If the individual is married and files a separate return, but both spouses are
147	147	at least 67 years of age before the close of the taxable year to which the subtraction
148	148	relates, the sum of the amount claimed by the spouses as a subtraction under this
149	149	subdivision may not exceed $150,000 for that taxable year.
150	150	e. The individual has not claimed any credit under s. 71.07.
151	151	SECTION 6. 71.05 (6) (b) 54mn. of the statutes is created to read:
152	152	71.05 (6) (b) 54mn. For taxable years beginning after December 31, 2023, for
153	153	an individual who is a nonresident or a part-year resident of this state, the amount
154	154	that is calculated by multiplying the applicable amount under subd. 54m. b., c., or
155	155	d. by a fraction the numerator of which is the individual's wages, salary, tips,
156	156	unearned income, and net earnings from a trade or business that are taxable by this
157	157	state and the denominator of which is the individual's total wages, salary, tips,
158	158	unearned income, and net earnings from a trade or business.
159	159	SECTION 7. 71.83 (1) (a) 6. of the statutes is amended to read:
160	160	71.83 (1) (a) 6. `Retirement plans.' Any natural person who is liable for a
161	161	penalty for federal income tax purposes under section 72 (m) (5), (q), (t), and (v), 4973,
162	162	4974, 4975, or 4980A of the Internal Revenue Code is liable for 33 percent of the
163	163	federal penalty unless the income received is exempt from taxation under s. 71.05
164	164	(1) (a) or (6) (b) 54., 54m., or 54mn. The penalties provided under this subdivision
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190	190	SECTION 7
191	191	ASSEMBLY BILL 384
192	192	shall be assessed, levied, and collected in the same manner as income or franchise
193	193	taxes.
194	194	(END)
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