Wisconsin 2023-2024 Regular Session

Wisconsin Assembly Bill AB793 Compare Versions

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1		-	Date of enactment: March 21, 2024
2		-	2023 Assembly Bill 793 Date of publication*: March 22, 2024
3		-	2023 WISCONSIN ACT 148
4		-	AN ACT to amend 71.05 (6) (a) 26. a., 71.05 (6) (a) 26. b., 71.05 (6) (a) 26. c., 71.05 (6) (b) 32. a., 71.05 (6) (b) 32.
5		-	ae., 71.05 (6) (b) 32. am., 71.07 (10) (a) 1., 71.07 (10) (a) 3., 71.07 (10) (b), 71.07 (10) (c) 2., 71.28 (10) (c) 2., 71.47
6		-	(10) (c) 2. and 224.50 (2) (a); and to create 71.05 (6) (b) 32. ap., 71.07 (10) (c) 3., 71.28 (10) (c) 3., 71.47 (10) (c)
7		-	3. and 71.98 (11) of the statutes; relating to: modifying the tax treatment of college savings accounts and the
8		-	employee college savings account contribution credit.
9		-	The people of the state of Wisconsin, represented in
10		-	senate and assembly, do enact as follows:
11		-	SECTION 1. 71.05 (6) (a) 26. a. of the statutes is
12		-	amended to read:
13		-	71.05 (6) (a) 26. a. To the extent that the receipt of
14		-	such the amounts by the owner or beneficiary of the
15		-	account results in a penalty as provided in 26 USC 529 (c)
16		-	(6), any amount that was not used for qualified higher
17		-	education expenses, as that term is defined in 26 USC 529
18		-	(c) (7), (8), and (9) and (e) (3), and was contributed to the
19		-	account after December 31, 2013, except that this subd.
20		-	26. a. applies only to amounts for which a subtraction was
21		-	made under par. (b) 32. or 32m. For purposes of this subd.
22		-	26. a., a first in, first out method of accounting shall apply
23		-	to the account.
24		-	SECTION 2. 71.05 (6) (a) 26. b. of the statutes is
25		-	amended to read:
26		-	71.05 (6) (a) 26. b. Any amount rolled over by an
27		-	owner into another state’s qualified tuition program, as
28		-	described in 26 USC 529 (c) (3) (C) (i), to the extent that
29		-	the amount was previously claimed as a deduction under
30		-	par. (b) 32. or 32m. For purposes of this subd. 26. b., a
31		-	first in, first out method of accounting shall apply to the
32		-	account.
33		-	SECTION 3. 71.05 (6) (a) 26. c. of the statutes is
34		-	amended to read:
35		-	71.05 (6) (a) 26. c. To the extent that an amount is not
36		-	otherwise added back under this subdivision, any amount
37		-	withdrawn from a college savings the account, as
38		-	described in s. 224.50, for any purpose if the withdrawn
39		-	amount was contributed to the account within 365 days
40		-	of the day on which the amount was withdrawn from such
41		-	an the account and if the withdrawn amount was previ-
42		-	ously subtracted under par. (b) 32. For purposes of this
43		-	subd. 26. c., a first in, first out method of accounting shall
44		-	apply to the account.
45		-	SECTION 4. 71.05 (6) (b) 32. a. of the statutes is
46		-	amended to read:
47		-	71.05 (6) (b) 32. a. Except as otherwise provided in
48		-	this subdivision, an amount equal to not more than
49		-	$3,000 $5,000 per beneficiary, by each contributor, or
50		-	$1,500 $2,500 by each contributor who is married and
51		-	files separately, to an account for each year to which the
52		-	claim relates, except that the total amount for which a
53		-	deduction may be claimed under this subdivision and
54		-	under subd. 33., per beneficiary by any claimant may not
55		-	exceed $3,000 $5,000 each year, or $1,500 $2,500 each
56		-	year by any claimant who is married and files separately.
57		-	* Section 991.11, WISCONSIN STATUTES: Effective date of acts. “Every act and every portion of an act enacted by the legislature over the governor’s
58		-	partial veto which does not expressly prescribe the time when it takes effect shall take effect on the day after its date of publication.” − 2 −2023 Wisconsin Act 148 2023 Assembly Bill 793
59		-	In the case of a married couple, the total deduction under
60		-	this subdivision and under subd. 33., per beneficiary by
61		-	the married couple may not exceed $3,000 $5,000 each
62		-	year. In the case of divorced parents, the total deduction
63		-	under this subdivision and under subd. 33., per benefi-
64		-	ciary by the formerly married couple, may not exceed
65		-	$3,000, and the maximum amount that may be deducted
66		-	by each former spouse is $1,500, unless the divorce judg-
67		-	ment specifies a different division of the $3,000 maxi-
68		-	mum that may be claimed by each former spouse. For
69		-	taxable years beginning after December 31, 2013 2024,
70		-	the dollar amounts in this subd. 32. a., and the dollar
71		-	amounts in subd. 33. a., shall be increased each year by
72		-	a percentage equal to the percentage change between the
73		-	U.S. consumer price index for all urban consumers, U.S.
74		-	city average, for the month of August of the previous year
75		-	and the U.S. consumer price index for all urban con-
76		-	sumers, U.S. city average, for the month of August 2012
77		-	2023, as determined by the federal department of labor,
78		-	except that the adjustment may occur only if the resulting
79		-	amount is greater than the corresponding amount that
80		-	was calculated for the previous year. Each amount that
81		-	is revised under this subd. 32. a. and under subd. 33. a.
82		-	shall be rounded to the nearest multiple of $10 if the
83		-	revised amount is not a multiple of $10 or, if the revised
84		-	amount is a multiple of $5, such an amount shall be
85		-	increased to the next higher multiple of $10. The depart-
86		-	ment of revenue shall annually adjust the changes in dol-
87		-	lar amounts required under this subd. 32. a. and incorpo-
88		-	rate the changes into the income tax forms and
89		-	instructions. Any amount that is paid into an account
90		-	under this subdivision that exceeds the maximum amount
91		-	that may be subtracted under this subdivision may be car-
92		-	ried forward to the next taxable year, and thereafter, sub-
93		-	ject to the limitations in this subdivision.
94		-	SECTION 5. 71.05 (6) (b) 32. ae. of the statutes is
95		-	amended to read:
96		-	71.05 (6) (b) 32. ae. No carryover carry−over that
97		-	would otherwise be authorized under this subdivision
98		-	may be allowed if the carryover carry−over amount was
99		-	withdrawn from an account for any purpose and the with-
100		-	drawal occurred within 365 days of the day on which the
101		-	amount was contributed to the account. For purposes of
102		-	this subd. 32. ae., a first in, first out method of accounting
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	3	+	2023 - 2024 LEGISLATURE
	4	+	2023 ASSEMBLY BILL 793
	5	+	December 8, 2023 - Introduced by Representatives BINSFELD, JOERS, ALLEN,
	6	+	BEHNKE, BRANDTJEN, CALLAHAN, CONLEY, DITTRICH, GOEBEN, GOYKE, KITCHENS,
	7	+	MACCO, MAXEY, MELOTIK, MURSAU, OHNSTAD, ORTIZ-VELEZ, PENTERMAN,
	8	+	RATCLIFF and RETTINGER, cosponsored by Senators CABRAL-GUEVARA,
	9	+	HESSELBEIN, L. JOHNSON, LARSON, NASS, SPREITZER and WIRCH. Referred to
	10	+	Committee on Ways and Means.
	11	+	*AUTHORS SUBJECT TO CHANGE*
	12	+	AN ACT to amend 71.05 (6) (a) 26. a., 71.05 (6) (a) 26. b., 71.05 (6) (a) 26. c., 71.05
	13	+	(6) (b) 32. a., 71.05 (6) (b) 32. ae., 71.05 (6) (b) 32. am., 71.07 (10) (a) 1., 71.07
	14	+	(10) (a) 3., 71.07 (10) (b), 71.07 (10) (c) 2., 71.28 (10) (c) 2., 71.47 (10) (c) 2. and
	15	+	224.50 (2) (a); and to create 71.05 (6) (b) 32. ap., 71.07 (10) (c) 3., 71.28 (10) (c)
	16	+	3., 71.47 (10) (c) 3. and 71.98 (11) of the statutes; relating to: modifying the tax
	17	+	treatment of college savings accounts and the employee college savings account
	18	+	contribution credit.
	19	+	Analysis by the Legislative Reference Bureau
	20	+	This bill modifies the individual income tax treatment for contributions to and
	21	+	withdrawals from college savings accounts and the employee college savings account
	22	+	contribution credit.
	23	+	Under current law, the College Savings Program Board, which is attached to
	24	+	the Department of Financial Institutions, administers the state's college savings
	25	+	programs. These programs, known as “Edvest” and “Tomorrow's Scholar,” are
	26	+	qualified tuition programs authorized under federal law. Under the programs,
	27	+	anyone may contribute to an account, commonly called a “529 account,” for the
	28	+	benefit of a prospective student. For state income tax purposes, individuals may
	29	+	deduct their contributions to accounts established under the Wisconsin qualified
	30	+	tuition programs. Withdrawals from an account are tax-free if used for qualified
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	39	+	ASSEMBLY BILL 793
	40	+	educational expenses but subject to negative federal and state tax consequences if
	41	+	used for nonqualified expenses.
	42	+	The bill makes the following changes to the state individual income tax
	43	+	treatment for contributions to and withdrawals from 529 accounts:
	44	+	1. Increases the maximum amount that may be deducted. Under current law,
	45	+	the maximum amount that a contributor may deduct is annually indexed for
	46	+	inflation and, in 2022 is $3,560, which is reduced to $1,780 for a married individual
	47	+	filing a separate return or, in the case of divorced parents, each former spouse. The
	48	+	maximum amount in 2023 is $3,860, reduced to $1,930. The bill increases these
	49	+	amounts to $5,000 and $2,500, which are indexed annually for inflation, and repeals
	50	+	the limitation for divorced parents.
	51	+	2. Requires the use of a first in, first out method of accounting for purposes of
	52	+	provisions in current law requiring that account withdrawals be added to income for
	53	+	state tax purposes and restricting carry-overs of contributions in excess of the
	54	+	maximum deduction threshold if the carry-over amount was withdrawn from the
	55	+	account within 365 days of being contributed.
	56	+	3. Conforms the definition of “qualified higher education expense” to federal
	57	+	law. In recent years, the federal definition of “qualified higher education expense”
	58	+	has been expanded to include tuition expenses for elementary and secondary schools,
	59	+	expenses for apprenticeship programs, and qualified education loan repayments.
	60	+	The bill conforms state law to the federal definition.
	61	+	Additionally, the bill modifies the tax credit that may be claimed by an employer
	62	+	for contributions to an employee's 529 account. Under current law, the maximum
	63	+	credit per employee is 25 percent of the amount the employer contributes to the 529
	64	+	account, up to a maximum contribution that is 25 percent of the maximum amount
	65	+	that an individual contributor may deduct under state law. The maximum credit is
	66	+	$222.50 for 2022 and $241.25 for 2023. Under the bill, the maximum credit per
	67	+	employee is 50 percent of the amount the employer contributes to the 529 account,
	68	+	not exceeding a maximum credit of $800, adjusted annually for inflation. The bill
	69	+	also specifies that sole proprietors may claim the credit and that the credit may only
	70	+	be claimed for a contribution to an employee's 529 account if the employee's
	71	+	compensation is reported, or required to be reported, on a W-2 form issued by the
	72	+	employer.
	73	+	Because this bill relates to an exemption from state or local taxes, it may be
	74	+	referred to the Joint Survey Committee on Tax Exemptions for a report to be printed
	75	+	as an appendix to the bill.
	76	+	For further information see the state fiscal estimate, which will be printed as
	77	+	an appendix to this bill.
	78	+	The people of the state of Wisconsin, represented in senate and assembly, do
	79	+	enact as follows:
	80	+	SECTION 1. 71.05 (6) (a) 26. a. of the statutes is amended to read:1 - 3 -2023 - 2024 Legislature
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	83	+	SECTION 1
	84	+	ASSEMBLY BILL 793
	85	+	71.05 (6) (a) 26. a. To the extent that the receipt of such the amounts by the
	86	+	owner or beneficiary of the account results in a penalty as provided in 26 USC 529
	87	+	(c) (6), any amount that was not used for qualified higher education expenses, as that
	88	+	term is defined in 26 USC 529 (c) (7), (8), and (9) and (e) (3), and was contributed to
	89	+	the account after December 31, 2013, except that this subd. 26. a. applies only to
	90	+	amounts for which a subtraction was made under par. (b) 32. or 32m. For purposes
	91	+	of this subd. 26. a., a first in, first out method of accounting shall apply to the account.
	92	+	SECTION 2. 71.05 (6) (a) 26. b. of the statutes is amended to read:
	93	+	71.05 (6) (a) 26. b. Any amount rolled over by an owner into another state's
	94	+	qualified tuition program, as described in 26 USC 529 (c) (3) (C) (i), to the extent that
	95	+	the amount was previously claimed as a deduction under par. (b) 32. or 32m. For
	96	+	purposes of this subd. 26. b., a first in, first out method of accounting shall apply to
	97	+	the account.
	98	+	SECTION 3. 71.05 (6) (a) 26. c. of the statutes is amended to read:
	99	+	71.05 (6) (a) 26. c. To the extent that an amount is not otherwise added back
	100	+	under this subdivision, any amount withdrawn from a college savings the account,
	101	+	as described in s. 224.50, for any purpose if the withdrawn amount was contributed
	102	+	to the account within 365 days of the day on which the amount was withdrawn from
	103	+	such an the account and if the withdrawn amount was previously subtracted under
	104	+	par. (b) 32. For purposes of this subd. 26. c., a first in, first out method of accounting
103	105		shall apply to the account.
104		-	SECTION 6. 71.05 (6) (b) 32. am. of the statutes is
105		-	amended to read:
106		-	71.05 (6) (b) 32. am. Any carryover carry−over
107		-	amount that is otherwise eligible for a subtraction under
108		-	this subdivision shall be reduced by an amount equal to
109		-	the amount of a withdrawal from an account that was not
110		-	used for qualified higher education expenses, as that term
111		-	is defined in 26 USC 529 (c) (7), (8), and (9) and (e) (3),
112		-	to the extent that the withdrawn amount exceeds the
113		-	amount that is added to income under par. (a) 26.
114		-	SECTION 7. 71.05 (6) (b) 32. ap. of the statutes is cre-
115		-	ated to read:
116		-	71.05 (6) (b) 32. ap. No subtraction may be allowed
117		-	under this subdivision for any amount contributed to an
118		-	account for which a credit is claimed under s. 71.07 (10),
119		-	71.28 (10), or 71.47 (10).
120		-	SECTION 8. 71.07 (10) (a) 1. of the statutes is
121		-	amended to read:
122		-	71.07 (10) (a) 1. “Claimant” means an individual
123		-	who files a claim under this subsection and who is a sole
124		-	proprietor and an employer and contributes to an employ-
125		-	ee’s college savings account under par. (b). or who is a
126		-	partner of a partnership, member of a limited liability
127		-	company, or shareholder of a tax−option corporation that
128		-	is an employer and that contributes to an employee’s col-
129		-	lege savings account under par. (b).
130		-	SECTION 9. 71.07 (10) (a) 3. of the statutes is
131		-	amended to read:
132		-	71.07 (10) (a) 3. “Employer” means an employer that
133		-	is a partnership, as defined in s. 71.195, or a tax−option
134		-	corporation, as defined in s. 71.34 (2) a person for whom
135		-	an individual performs or performed any service as an
136		-	employee of that person and who is required to furnish a
137		-	W−2 form to the employee for federal income tax pur-
138		-	poses.
139		-	SECTION 10. 71.07 (10) (b) of the statutes is amended
140		-	to read:
141		-	71.07 (10) (b) Filing claims. Subject to the limita-
142		-	tions provided in this subsection, a claimant may claim
143		-	as a credit against the tax imposed under s. 71.02, up to
144		-	the amount of those taxes, for each employee of an
145		-	employer, the claimant’s proportionate share, as com-
146		-	puted under par. (c) 1., of an amount equal to the amount
147		-	the employer paid into a college savings account owned
148		-	by the employee in the taxable year in which the contribu-
149		-	tion is made.
150		-	SECTION 11. 71.07 (10) (c) 2. of the statutes is
151		-	amended to read:
152		-	71.07 (10) (c) 2. The maximum amount of the credit
153		-	per employee that a claimant may claim under this sub-
154		-	section is the claimant’s proportionate share of an amount
155		-	equal to 25 50 percent of the amount the employee’s
156		-	employer contributed to the employee’s college savings
157		-	account up to a maximum contribution equal to 25 per-
158		-	cent of the maximum amount that an individual contribu-
159		-	tor may deduct under s. 71.05 (6) (b) 32. a. per benefi-
160		-	ciary, not to exceed a maximum credit of $800. For
161		-	taxable years beginning after December 31, 2024, the
162		-	dollar amount in this subdivision shall be increased each
163		-	year by a percentage equal to the percentage change
164		-	between the U.S. consumer price index for all urban con-
165		-	sumers, U.S. city average, for the month of August of the
166		-	previous year and the U.S. consumer price index for all
167		-	urban consumers, U.S. city average, for the month of
168		-	August 2023, as determined by the federal department of − 3 − 2023 Wisconsin Act 148 2023 Assembly Bill 793
169		-	labor, except that the adjustment may occur only if the
170		-	resulting amount is greater than the corresponding
171		-	amount that was calculated for the previous year. The
172		-	amount that is revised under this subdivision shall be
173		-	rounded to the nearest multiple of $10 if the revised
174		-	amount is not a multiple of $10 or, if the revised amount
175		-	is a multiple of $5, such an amount shall be increased to
176		-	the next higher multiple of $10. The department of rev-
177		-	enue shall annually adjust the change in the dollar
178		-	amount required under this subdivision and incorporate
179		-	the change into the income tax forms and instructions.
180		-	SECTION 12. 71.07 (10) (c) 3. of the statutes is created
181		-	to read:
182		-	71.07 (10) (c) 3. A credit may be claimed under par.
183		-	(b) only if, for federal income tax purposes, the compen-
184		-	sation of the employee described in par. (b) is reported,
185		-	or required to be reported, on a W−2 form issued by the
186		-	claimant.
187		-	SECTION 13. 71.28 (10) (c) 2. of the statutes is
188		-	amended to read:
189		-	71.28 (10) (c) 2. The maximum amount of the credit
190		-	per employee that a claimant may claim under this sub-
191		-	section is an amount equal to 25 50 percent of the amount
192		-	the claimant contributed to the employee’s college sav-
193		-	ings account up to a maximum contribution equal to 25
194		-	percent of the maximum amount that an individual con-
195		-	tributor may deduct under s. 71.05 (6) (b) 32. a. per bene-
196		-	ficiary, not to exceed a maximum credit of $800. For tax-
197		-	able years beginning after December 31, 2024, the dollar
198		-	amount in this subdivision shall be increased each year by
199		-	a percentage equal to the percentage change between the
200		-	U.S. consumer price index for all urban consumers, U.S.
201		-	city average, for the month of August of the previous year
202		-	and the U.S. consumer price index for all urban con-
203		-	sumers, U.S. city average, for the month of August 2023,
204		-	as determined by the federal department of labor, except
205		-	that the adjustment may occur only if the resulting
206		-	amount is greater than the corresponding amount that
207		-	was calculated for the previous year. The amount that is
208		-	revised under this subdivision shall be rounded to the
209		-	nearest multiple of $10 if the revised amount is not a mul-
210		-	tiple of $10 or, if the revised amount is a multiple of $5,
211		-	such an amount shall be increased to the next higher mul-
212		-	tiple of $10. The department of revenue shall annually
213		-	adjust the change in the dollar amount required under this
214		-	subdivision and incorporate the change into the income
215		-	tax forms and instructions.
216		-	SECTION 14. 71.28 (10) (c) 3. of the statutes is created
217		-	to read:
218		-	71.28 (10) (c) 3. A credit may be claimed under par.
219		-	(b) only if, for federal income tax purposes, the compen-
220		-	sation of the employee described in par. (b) is reported,
221		-	or required to be reported, on a W−2 form issued by the
222		-	claimant.
223		-	SECTION 15. 71.47 (10) (c) 2. of the statutes is
224		-	amended to read:
225		-	71.47 (10) (c) 2. The maximum amount of the credit
226		-	per employee that a claimant may claim under this sub-
227		-	section is an amount equal to 25 50 percent of the amount
228		-	the claimant contributed to the employee’s college sav-
229		-	ings account up to a maximum contribution equal to 25
230		-	percent of the maximum amount that an individual con-
231		-	tributor may deduct under s. 71.05 (6) (b) 32. a. per bene-
232		-	ficiary, not to exceed a maximum credit of $800. For tax-
233		-	able years beginning after December 31, 2024, the dollar
234		-	amount in this subdivision shall be increased each year by
235		-	a percentage equal to the percentage change between the
236		-	U.S. consumer price index for all urban consumers, U.S.
237		-	city average, for the month of August of the previous year
238		-	and the U.S. consumer price index for all urban con-
239		-	sumers, U.S. city average, for the month of August 2023,
240		-	as determined by the federal department of labor, except
241		-	that the adjustment may occur only if the resulting
242		-	amount is greater than the corresponding amount that
243		-	was calculated for the previous year. The amount that is
244		-	revised under this subdivision shall be rounded to the
245		-	nearest multiple of $10 if the revised amount is not a mul-
246		-	tiple of $10 or, if the revised amount is a multiple of $5,
247		-	such an amount shall be increased to the next higher mul-
248		-	tiple of $10. The department of revenue shall annually
249		-	adjust the change in the dollar amount required under this
250		-	subdivision and incorporate the change into the income
251		-	tax forms and instructions.
252		-	SECTION 16. 71.47 (10) (c) 3. of the statutes is created
253		-	to read:
254		-	71.47 (10) (c) 3. A credit may be claimed under par.
255		-	(b) only if, for federal income tax purposes, the compen-
256		-	sation of the employee described in par. (b) is reported,
257		-	or required to be reported, on a W−2 form issued by the
258		-	claimant.
259		-	SECTION 17. 71.98 (11) of the statutes is created to
260		-	read:
261		-	71.98 (11) QUALIFIED TUITION PROGRAMS. For taxable
262		-	years beginning after December 31, 2021, sections 221
263		-	(e) (1) and 529 of the Internal Revenue Code as in effect
264		-	for federal purposes, relating to qualified tuition pro-
265		-	grams.
266		-	SECTION 18. 224.50 (2) (a) of the statutes is amended
267		-	to read:
268		-	224.50 (2) (a) Except as provided in s. 224.51, estab-
269		-	lish and administer a college savings program that allows
270		-	an individual, trust, legal guardian, or entity described
271		-	under 26 USC 529 (e) (1) (C) to establish a college sav-
272		-	ings account to cover tuition, fees, and the costs of room
273		-	and board, books, supplies, and equipment required for
274		-	the enrollment or attendance of a beneficiary at an eligi-
275		-	ble educational institution, as defined under 26 USC 529,
276		-	and to cover tuition expenses in connection with enroll-
277		-	ment or attendance at an elementary or secondary public,
278		-	private, or religious school, as described in section 11032
279		-	of P.L. 115−97, related to qualified tuition programs
280		-	under for the purposes set forth in 26 USC 529. − 4 −2023 Wisconsin Act 148 2023 Assembly Bill 793
	106	+	SECTION 4. 71.05 (6) (b) 32. a. of the statutes is amended to read:
	107	+	71.05 (6) (b) 32. a. Except as otherwise provided in this subdivision, an amount
	108	+	equal to not more than $3,000 $5,000 per beneficiary, by each contributor, or $1,500
	109	+	$2,500 by each contributor who is married and files separately, to an account for each
	110	+	1
	111	+	2
	112	+	3
	113	+	4
	114	+	5
	115	+	6
	116	+	7
	117	+	8
	118	+	9
	119	+	10
	120	+	11
	121	+	12
	122	+	13
	123	+	14
	124	+	15
	125	+	16
	126	+	17
	127	+	18
	128	+	19
	129	+	20
	130	+	21
	131	+	22
	132	+	23
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	134	+	25 - 4 -2023 - 2024 Legislature LRB-3831/1
	135	+	JK:amn
	136	+	SECTION 4 ASSEMBLY BILL 793
	137	+	year to which the claim relates, except that the total amount for which a deduction
	138	+	may be claimed under this subdivision and under subd. 33., per beneficiary by any
	139	+	claimant may not exceed $3,000 $5,000 each year, or $1,500 $2,500 each year by any
	140	+	claimant who is married and files separately. In the case of a married couple, the
	141	+	total deduction under this subdivision and under subd. 33., per beneficiary by the
	142	+	married couple may not exceed $3,000 $5,000 each year. In the case of divorced
	143	+	parents, the total deduction under this subdivision and under subd. 33., per
	144	+	beneficiary by the formerly married couple, may not exceed $3,000, and the
	145	+	maximum amount that may be deducted by each former spouse is $1,500, unless the
	146	+	divorce judgment specifies a different division of the $3,000 maximum that may be
	147	+	claimed by each former spouse. For taxable years beginning after December 31, 2013
	148	+	2024, the dollar amounts in this subd. 32. a., and the dollar amounts in subd. 33. a.,
	149	+	shall be increased each year by a percentage equal to the percentage change between
	150	+	the U.S. consumer price index for all urban consumers, U.S. city average, for the
	151	+	month of August of the previous year and the U.S. consumer price index for all urban
	152	+	consumers, U.S. city average, for the month of August 2012 2023, as determined by
	153	+	the federal department of labor, except that the adjustment may occur only if the
	154	+	resulting amount is greater than the corresponding amount that was calculated for
	155	+	the previous year. Each amount that is revised under this subd. 32. a. and under
	156	+	subd. 33. a. shall be rounded to the nearest multiple of $10 if the revised amount is
	157	+	not a multiple of $10 or, if the revised amount is a multiple of $5, such an amount
	158	+	shall be increased to the next higher multiple of $10. The department of revenue
	159	+	shall annually adjust the changes in dollar amounts required under this subd. 32.
	160	+	a. and incorporate the changes into the income tax forms and instructions. Any
	161	+	amount that is paid into an account under this subdivision that exceeds the
	162	+	1
	163	+	2
	164	+	3
	165	+	4
	166	+	5
	167	+	6
	168	+	7
	169	+	8
	170	+	9
	171	+	10
	172	+	11
	173	+	12
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	175	+	14
	176	+	15
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	186	+	25 - 5 -2023 - 2024 Legislature
	187	+	LRB-3831/1
	188	+	JK:amn
	189	+	SECTION 4
	190	+	ASSEMBLY BILL 793
	191	+	maximum amount that may be subtracted under this subdivision may be carried
	192	+	forward to the next taxable year, and thereafter, subject to the limitations in this
	193	+	subdivision.
	194	+	SECTION 5. 71.05 (6) (b) 32. ae. of the statutes is amended to read:
	195	+	71.05 (6) (b) 32. ae. No carryover carry-over that would otherwise be
	196	+	authorized under this subdivision may be allowed if the carryover carry-over
	197	+	amount was withdrawn from an account for any purpose and the withdrawal
	198	+	occurred within 365 days of the day on which the amount was contributed to the
	199	+	account. For purposes of this subd. 32. ae., a first in, first out method of accounting
	200	+	shall apply to the account.
	201	+	SECTION 6. 71.05 (6) (b) 32. am. of the statutes is amended to read:
	202	+	71.05 (6) (b) 32. am. Any carryover carry-over amount that is otherwise eligible
	203	+	for a subtraction under this subdivision shall be reduced by an amount equal to the
	204	+	amount of a withdrawal from an account that was not used for qualified higher
	205	+	education expenses, as that term is defined in 26 USC 529 (c) (7), (8), and (9) and (e)
	206	+	(3), to the extent that the withdrawn amount exceeds the amount that is added to
	207	+	income under par. (a) 26.
	208	+	SECTION 7. 71.05 (6) (b) 32. ap. of the statutes is created to read:
	209	+	71.05 (6) (b) 32. ap. No subtraction may be allowed under this subdivision for
	210	+	any amount contributed to an account for which a credit is claimed under s. 71.07
	211	+	(10), 71.28 (10), or 71.47 (10).
	212	+	SECTION 8. 71.07 (10) (a) 1. of the statutes is amended to read:
	213	+	71.07 (10) (a) 1. “Claimant" means an individual who files a claim under this
	214	+	subsection and who is a sole proprietor and an employer and contributes to an
	215	+	employee's college savings account under par. (b). or who is a partner of a
	216	+	1
	217	+	2
	218	+	3
	219	+	4
	220	+	5
	221	+	6
	222	+	7
	223	+	8
	224	+	9
	225	+	10
	226	+	11
	227	+	12
	228	+	13
	229	+	14
	230	+	15
	231	+	16
	232	+	17
	233	+	18
	234	+	19
	235	+	20
	236	+	21
	237	+	22
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	240	+	25 - 6 -2023 - 2024 Legislature LRB-3831/1
	241	+	JK:amn
	242	+	SECTION 8 ASSEMBLY BILL 793
	243	+	partnership, member of a limited liability company, or shareholder of a tax-option
	244	+	corporation that is an employer and that contributes to an employee's college savings
	245	+	account under par. (b).
	246	+	SECTION 9. 71.07 (10) (a) 3. of the statutes is amended to read:
	247	+	71.07 (10) (a) 3. “Employer” means an employer that is a partnership, as
	248	+	defined in s. 71.195, or a tax-option corporation, as defined in s. 71.34 (2) a person
	249	+	for whom an individual performs or performed any service as an employee of that
	250	+	person and who is required to furnish a W-2 form to the employee for federal income
	251	+	tax purposes.
	252	+	SECTION 10. 71.07 (10) (b) of the statutes is amended to read:
	253	+	71.07 (10) (b) Filing claims. Subject to the limitations provided in this
	254	+	subsection, a claimant may claim as a credit against the tax imposed under s. 71.02,
	255	+	up to the amount of those taxes, for each employee of an employer, the claimant's
	256	+	proportionate share, as computed under par. (c) 1., of an amount equal to the amount
	257	+	the employer paid into a college savings account owned by the employee in the
	258	+	taxable year in which the contribution is made.
	259	+	SECTION 11. 71.07 (10) (c) 2. of the statutes is amended to read:
	260	+	71.07 (10) (c) 2. The maximum amount of the credit per employee that a
	261	+	claimant may claim under this subsection is the claimant's proportionate share of an
	262	+	amount equal to 25 50 percent of the amount the employee's employer contributed
	263	+	to the employee's college savings account up to a maximum contribution equal to 25
	264	+	percent of the maximum amount that an individual contributor may deduct under
	265	+	s. 71.05 (6) (b) 32. a. per beneficiary, not to exceed a maximum credit of $800. For
	266	+	taxable years beginning after December 31, 2024, the dollar amount in this
	267	+	subdivision shall be increased each year by a percentage equal to the percentage
	268	+	1
	269	+	2
	270	+	3
	271	+	4
	272	+	5
	273	+	6
	274	+	7
	275	+	8
	276	+	9
	277	+	10
	278	+	11
	279	+	12
	280	+	13
	281	+	14
	282	+	15
	283	+	16
	284	+	17
	285	+	18
	286	+	19
	287	+	20
	288	+	21
	289	+	22
	290	+	23
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	292	+	25 - 7 -2023 - 2024 Legislature
	293	+	LRB-3831/1
	294	+	JK:amn
	295	+	SECTION 11
	296	+	ASSEMBLY BILL 793
	297	+	change between the U.S. consumer price index for all urban consumers, U.S. city
	298	+	average, for the month of August of the previous year and the U.S. consumer price
	299	+	index for all urban consumers, U.S. city average, for the month of August 2023, as
	300	+	determined by the federal department of labor, except that the adjustment may occur
	301	+	only if the resulting amount is greater than the corresponding amount that was
	302	+	calculated for the previous year. The amount that is revised under this subdivision
	303	+	shall be rounded to the nearest multiple of $10 if the revised amount is not a multiple
	304	+	of $10 or, if the revised amount is a multiple of $5, such an amount shall be increased
	305	+	to the next higher multiple of $10. The department of revenue shall annually adjust
	306	+	the change in the dollar amount required under this subdivision and incorporate the
	307	+	change into the income tax forms and instructions.
	308	+	SECTION 12. 71.07 (10) (c) 3. of the statutes is created to read:
	309	+	71.07 (10) (c) 3. A credit may be claimed under par. (b) only if, for federal income
	310	+	tax purposes, the compensation of the employee described in par. (b) is reported, or
	311	+	required to be reported, on a W-2 form issued by the claimant.
	312	+	SECTION 13. 71.28 (10) (c) 2. of the statutes is amended to read:
	313	+	71.28 (10) (c) 2. The maximum amount of the credit per employee that a
	314	+	claimant may claim under this subsection is an amount equal to 25 50 percent of the
	315	+	amount the claimant contributed to the employee's college savings account up to a
	316	+	maximum contribution equal to 25 percent of the maximum amount that an
	317	+	individual contributor may deduct under s. 71.05 (6) (b) 32. a. per beneficiary, not to
	318	+	exceed a maximum credit of $800. For taxable years beginning after December 31,
	319	+	2024, the dollar amount in this subdivision shall be increased each year by a
	320	+	percentage equal to the percentage change between the U.S. consumer price index
	321	+	for all urban consumers, U.S. city average, for the month of August of the previous
	322	+	1
	323	+	2
	324	+	3
	325	+	4
	326	+	5
	327	+	6
	328	+	7
	329	+	8
	330	+	9
	331	+	10
	332	+	11
	333	+	12
	334	+	13
	335	+	14
	336	+	15
	337	+	16
	338	+	17
	339	+	18
	340	+	19
	341	+	20
	342	+	21
	343	+	22
	344	+	23
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	346	+	25 - 8 -2023 - 2024 Legislature LRB-3831/1
	347	+	JK:amn
	348	+	SECTION 13 ASSEMBLY BILL 793
	349	+	year and the U.S. consumer price index for all urban consumers, U.S. city average,
	350	+	for the month of August 2023, as determined by the federal department of labor,
	351	+	except that the adjustment may occur only if the resulting amount is greater than
	352	+	the corresponding amount that was calculated for the previous year. The amount
	353	+	that is revised under this subdivision shall be rounded to the nearest multiple of $10
	354	+	if the revised amount is not a multiple of $10 or, if the revised amount is a multiple
	355	+	of $5, such an amount shall be increased to the next higher multiple of $10. The
	356	+	department of revenue shall annually adjust the change in the dollar amount
	357	+	required under this subdivision and incorporate the change into the income tax
	358	+	forms and instructions.
	359	+	SECTION 14. 71.28 (10) (c) 3. of the statutes is created to read:
	360	+	71.28 (10) (c) 3. A credit may be claimed under par. (b) only if, for federal income
	361	+	tax purposes, the compensation of the employee described in par. (b) is reported, or
	362	+	required to be reported, on a W-2 form issued by the claimant.
	363	+	SECTION 15. 71.47 (10) (c) 2. of the statutes is amended to read:
	364	+	71.47 (10) (c) 2. The maximum amount of the credit per employee that a
	365	+	claimant may claim under this subsection is an amount equal to 25 50 percent of the
	366	+	amount the claimant contributed to the employee's college savings account up to a
	367	+	maximum contribution equal to 25 percent of the maximum amount that an
	368	+	individual contributor may deduct under s. 71.05 (6) (b) 32. a. per beneficiary, not to
	369	+	exceed a maximum credit of $800. For taxable years beginning after December 31,
	370	+	2024, the dollar amount in this subdivision shall be increased each year by a
	371	+	percentage equal to the percentage change between the U.S. consumer price index
	372	+	for all urban consumers, U.S. city average, for the month of August of the previous
	373	+	year and the U.S. consumer price index for all urban consumers, U.S. city average,
	374	+	1
	375	+	2
	376	+	3
	377	+	4
	378	+	5
	379	+	6
	380	+	7
	381	+	8
	382	+	9
	383	+	10
	384	+	11
	385	+	12
	386	+	13
	387	+	14
	388	+	15
	389	+	16
	390	+	17
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	399	+	LRB-3831/1
	400	+	JK:amn
	401	+	SECTION 15
	402	+	ASSEMBLY BILL 793
	403	+	for the month of August 2023, as determined by the federal department of labor,
	404	+	except that the adjustment may occur only if the resulting amount is greater than
	405	+	the corresponding amount that was calculated for the previous year. The amount
	406	+	that is revised under this subdivision shall be rounded to the nearest multiple of $10
	407	+	if the revised amount is not a multiple of $10 or, if the revised amount is a multiple
	408	+	of $5, such an amount shall be increased to the next higher multiple of $10. The
	409	+	department of revenue shall annually adjust the change in the dollar amount
	410	+	required under this subdivision and incorporate the change into the income tax
	411	+	forms and instructions.
	412	+	SECTION 16. 71.47 (10) (c) 3. of the statutes is created to read:
	413	+	71.47 (10) (c) 3. A credit may be claimed under par. (b) only if, for federal income
	414	+	tax purposes, the compensation of the employee described in par. (b) is reported, or
	415	+	required to be reported, on a W-2 form issued by the claimant.
	416	+	SECTION 17. 71.98 (11) of the statutes is created to read:
	417	+	71.98 (11) QUALIFIED TUITION PROGRAMS. For taxable years beginning after
	418	+	December 31, 2021, sections 221 (e) (1) and 529 of the Internal Revenue Code as in
	419	+	effect for federal purposes, relating to qualified tuition programs.
	420	+	SECTION 18. 224.50 (2) (a) of the statutes is amended to read:
	421	+	224.50 (2) (a) Except as provided in s. 224.51, establish and administer a
	422	+	college savings program that allows an individual, trust, legal guardian, or entity
	423	+	described under 26 USC 529 (e) (1) (C) to establish a college savings account to cover
	424	+	tuition, fees, and the costs of room and board, books, supplies, and equipment
	425	+	required for the enrollment or attendance of a beneficiary at an eligible educational
	426	+	institution, as defined under 26 USC 529, and to cover tuition expenses in connection
	427	+	with enrollment or attendance at an elementary or secondary public, private, or
	428	+	1
	429	+	2
	430	+	3
	431	+	4
	432	+	5
	433	+	6
	434	+	7
	435	+	8
	436	+	9
	437	+	10
	438	+	11
	439	+	12
	440	+	13
	441	+	14
	442	+	15
	443	+	16
	444	+	17
	445	+	18
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	453	+	JK:amn
	454	+	SECTION 18 ASSEMBLY BILL 793
	455	+	religious school, as described in section 11032 of P.L. 115-97, related to qualified
	456	+	tuition programs under 26 USC 529, to cover the expenses for fees, books, supplies,
	457	+	and equipment required for the participation of a beneficiary in an apprenticeship
	458	+	program described in 26 USC 529 (c) (8), and to cover the amounts paid as principal
	459	+	or interest on a qualified education loan, as defined in 26 USC 221 (d) (1), of the
	460	+	beneficiary or a sibling of the beneficiary.
281	461		SECTION 19.0Initial applicability.
282		-	(1) ADDITION TO TAX FOR NONQUALIFIED WITH-
283		-	DRAWALS PREVIOUSLY DEDUCTED. The treatment of s. 71.05
284		-	(6) (a) 26. a. that amends the definition of qualified higher
285		-	education expenses to include a cross−reference to 26
286		-	USC 529 (c) (7) first applies retroactively to taxable years
287		-	beginning after December 31, 2017. The treatment of s.
288		-	71.05 (6) (a) 26. a. that amends the definition of qualified
289		-	higher education expenses to include a cross−reference to
290		-	26 USC 529 (c) (8) and (9) first applies retroactively to
291		-	taxable years beginning after December 31, 2018. The
292		-	treatment of s. 71.05 (6) (a) 26. a. to require the use of a
293		-	first in, first out method of accounting and to include a
294		-	cross−reference to s. 71.05 (6) (b) 32m. first applies to tax-
295		-	able years beginning on January 1 of the year in which this
296		-	subsection takes effect, except that if this subsection takes
297		-	effect after July 31, the treatment first applies to taxable
298		-	years beginning on January 1 of the year following the
299		-	year in which this subsection takes effect.
300		-	(2) DEFINITION OF QUALIFIED HIGHER EDUCATION
301		-	EXPENSES. The treatment of s. 71.05 (6) (b) 32. am. that
302		-	amends the definition of qualified higher education
303		-	expenses to include a cross−reference to 26 USC 529 (c)
304		-	(7) first applies retroactively to taxable years beginning
305		-	after December 31, 2017. The treatment of s. 71.05 (6)
306		-	(b) 32. am. that amends the definition of qualified higher
307		-	education expenses to include a cross−reference to 26
308		-	USC 529 (c) (8) and (9) and the treatment of s. 224.50 (2)
309		-	(a) first apply retroactively to taxable years beginning
310		-	after December 31, 2018.
311		-	(3) TAX TREATMENT FOR CONTRIBUTIONS AND WITH-
312		-	DRAWALS; EMPLOYEE COLLEGE SAVINGS ACCOUNT CONTRI-
313		-	BUTION CREDIT. The treatment of ss. 71.05 (6) (a) 26. b.
314		-	and c. and (b) 32. a., ae., and ap., 71.07 (10) (a) 1. and 3.,
315		-	(b), and (c) 2. and 3., 71.28 (10) (c) 2. and 3., and 71.47
316		-	(10) (c) 2. and 3. first applies to taxable years beginning
317		-	on January 1, 2024.
	462	+	(1) ADDITION TO TAX FOR NONQUALIFIED WITHDRAWALS PREVIOUSLY DEDUCTED. The
	463	+	treatment of s. 71.05 (6) (a) 26. a. that amends the definition of qualified higher
	464	+	education expenses to include a cross-reference to 26 USC 529 (c) (7) first applies
	465	+	retroactively to taxable years beginning after December 31, 2017. The treatment of
	466	+	s. 71.05 (6) (a) 26. a. that amends the definition of qualified higher education
	467	+	expenses to include a cross-reference to 26 USC 529 (c) (8) and (9) first applies
	468	+	retroactively to taxable years beginning after December 31, 2018. The treatment of
	469	+	s. 71.05 (6) (a) 26. a. to require the use of a first in, first out method of accounting and
	470	+	to include a cross-reference to s. 71.05 (6) (b) 32m. first applies to taxable years
	471	+	beginning on January 1 of the year in which this subsection takes effect, except that
	472	+	if this subsection takes effect after July 31, the treatment first applies to taxable
	473	+	years beginning on January 1 of the year following the year in which this subsection
	474	+	takes effect.
	475	+	(2) DEFINITION OF QUALIFIED HIGHER EDUCATION EXPENSES. The treatment of s.
	476	+	71.05 (6) (b) 32. am. that amends the definition of qualified higher education
	477	+	expenses to include a cross-reference to 26 USC 529 (c) (7) first applies retroactively
	478	+	to taxable years beginning after December 31, 2017. The treatment of s. 71.05 (6)
	479	+	(b) 32. am. that amends the definition of qualified higher education expenses to
	480	+	1
	481	+	2
	482	+	3
	483	+	4
	484	+	5
	485	+	6
	486	+	7
	487	+	8
	488	+	9
	489	+	10
	490	+	11
	491	+	12
	492	+	13
	493	+	14
	494	+	15
	495	+	16
	496	+	17
	497	+	18
	498	+	19
	499	+	20
	500	+	21
	501	+	22
	502	+	23
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	504	+	25 - 11 -2023 - 2024 Legislature
	505	+	LRB-3831/1
	506	+	JK:amn
	507	+	SECTION 19
	508	+	ASSEMBLY BILL 793
	509	+	include a cross-reference to 26 USC 529 (c) (8) and (9) and the treatment of s. 224.50
	510	+	(2) (a) first apply retroactively to taxable years beginning after December 31, 2018.
	511	+	(3) TAX TREATMENT FOR CONTRIBUTIONS AND WITHDRAWALS; EMPLOYEE COLLEGE
	512	+	SAVINGS ACCOUNT CONTRIBUTION CREDIT. The treatment of ss. 71.05 (6) (a) 26. b. and
	513	+	c. and (b) 32. a., ae., and ap., 71.07 (10) (a) 1. and 3., (b), and (c) 2. and 3., 71.28 (10)
	514	+	(c) 2. and 3., and 71.47 (10) (c) 2. and 3. first applies to taxable years beginning on
	515	+	January 1, 2024.
	516	+	(END)
	517	+	1
	518	+	2
	519	+	3
	520	+	4
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