Wisconsin Assembly Bill AB458

Wisconsin 2023-2024 Regular Session

• Introduced: 9/28/23
• Refer: 9/28/23
• Failed: 4/15/24

Caption

Expanding the homestead income tax credit. (FE)

Impact

This bill's changes are designed to make the homestead tax credit more accessible to individuals and families with moderate incomes. By increasing the income limit and decreasing the reduction rate for high incomes, the state intends to alleviate some economic pressure on those who may struggle with housing costs. Additionally, the bill includes provisions for annual indexing of key figures, ensuring that the thresholds for income and property taxes are adjusted for inflation in upcoming years, which can help maintain the credit's effectiveness over time.

Summary

Assembly Bill 458 proposes significant changes to the homestead income tax credit system in Wisconsin. The bill aims to expand the current program by adjusting income thresholds and the calculation formula for tax credits related to property taxes and rent. Specifically, it allows a higher household income threshold of $35,000 (up from $24,680) and reduces the percentage that reduces property tax credits for claimants whose income exceeds $8,060 from 8.785% to 5.614%. This restructuring is expected to provide financial relief to more homeowners and renters throughout the state.

Contention

Notable points of contention may arise around the fiscal implications of increasing income thresholds and indexing for inflation. Some legislators might argue that expanding the credit could result in decreased state revenue, while others may stress the importance of providing financial aid to lower-income residents. Furthermore, the definition of what constitutes a 'homestead' and eligibility criteria may also evoke debates during discussions, particularly regarding who is most in need of these adjustments.