Wisconsin 2023-2024 Regular Session

Wisconsin Senate Bill SB382 Compare Versions

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

Old	New	Differences
1	1	LRB-3904/2
2	2	JK:skw
3	3	2023 - 2024 LEGISLATURE
4	4	2023 SENATE BILL 382
5	5	August 9, 2023 - Introduced by Senators CABRAL-GUEVARA, WANGGAARD, TAYLOR
6	6	and QUINN, cosponsored by Representatives STEFFEN, MYERS, ALLEN,
7	7	ARMSTRONG, BEHNKE, BINSFELD, BRANDTJEN, DONOVAN, DUCHOW, EDMING,
8	8	GOEBEN, GREEN, GUNDRUM, GUSTAFSON, KITCHENS, MACCO, MAGNAFICI, MAXEY,
9	9	MURSAU, O'CONNOR, ORTIZ-VELEZ, ROZAR, SCHMIDT, SCHRAA, TITTL, WICHGERS,
10	10	WITTKE and RETTINGER. Referred to Committee on Universities and Revenue.
11	11	AN ACT to amend 71.05 (1) (am), 71.05 (1) (an), 71.05 (6) (b) 4. (intro.), 71.05 (6)
12	12	(b) 54. (intro.) and 71.83 (1) (a) 6.; and to create 71.05 (6) (b) 54m. and 71.05
13	13	(6) (b) 54mn. of the statutes; relating to: an increase and expansion of the
14	14	retirement income subtraction.
15	15	Analysis by the Legislative Reference Bureau
16	16	This bill increases and expands the individual state income tax subtraction for
17	17	payments or distributions received from qualified retirement plans under the
18	18	Internal Revenue Code or from certain individual retirement accounts. Under the
19	19	bill, beginning in tax year 2024, up to $100,000 of payments or distributions received
20	20	from qualified retirement plans or certain individual retirement accounts may be
21	21	subtracted annually from an individual's taxable income, if the individual is at least
22	22	67 years of age. If the individual and individual's spouse are both at least 67 years
23	23	of age, the sum of the amount that the couple may subtract annually from their
24	24	combined taxable income may not exceed $150,000.
25	25	Under current law, up to $5,000 of payments or distributions received by
26	26	certain individuals from qualified retirement plans or from certain individual
27	27	retirement accounts may be subtracted. To be eligible, the individual must be at least
28	28	65 years old and have federal adjusted gross income under $15,000, or under $30,000
29	29	if married.
30	30	Because this bill relates to an exemption from state or local taxes, it may be
31	31	referred to the Joint Survey Committee on Tax Exemptions for a report to be printed
32	32	as an appendix to the bill.
33	33	1
34	34	2
35	35	3
36	36	4 - 2 -2023 - 2024 Legislature LRB-3904/2
37	37	JK:skw
38	38	SENATE BILL 382
39	39	For further information see the state fiscal estimate, which will be printed as
40	40	an appendix to this bill.
41	41	The people of the state of Wisconsin, represented in senate and assembly, do
42	42	enact as follows:
43	43	SECTION 1. 71.05 (1) (am) of the statutes is amended to read:
44	44	71.05 (1) (am) Military retirement systems. All retirement payments received
45	45	from the U.S. military employee retirement system, to the extent that such payments
46	46	are not exempt under par. (a) or sub. (6) (b) 54., 54m., or 54mn.
47	47	SECTION 2. 71.05 (1) (an) of the statutes is amended to read:
48	48	71.05 (1) (an) Uniformed services retirement benefits. All retirement payments
49	49	received from the U.S. government that relate to service with the coast guard, the
50	50	commissioned corps of the national oceanic and atmospheric administration, or the
51	51	commissioned corps of the public health service, to the extent that such payments are
52	52	not exempt under par. (a) or (am) or sub. (6) (b) 54., 54m., or 54mn.
53	53	SECTION 3. 71.05 (6) (b) 4. (intro.) of the statutes is amended to read:
54	54	71.05 (6) (b) 4. (intro.) Disability payments other than disability payments that
55	55	are paid from a retirement plan, the payments from which are exempt under subd.
56	56	subds. 54., 54m., and 54mn. and sub. (1) (am) and (an), if the individual either is
57	57	single or is married and files a joint return and is under 65 years of age before the
58	58	close of the taxable year to which the subtraction relates, retired on disability, and,
59	59	when the individual retired, was permanently and totally disabled. In this
60	60	subdivision, “permanently and totally disabled" means an individual who is unable
61	61	to engage in any substantial gainful activity by reason of any medically determinable
62	62	physical or mental impairment that can be expected to result in death or which has
63	63	lasted or can be expected to last for a continuous period of not less than 12 months.
64	64	1
65	65	2
66	66	3
67	67	4
68	68	5
69	69	6
70	70	7
71	71	8
72	72	9
73	73	10
74	74	11
75	75	12
76	76	13
77	77	14
78	78	15
79	79	16
80	80	17
81	81	18
82	82	19
83	83	20
84	84	21 - 3 -2023 - 2024 Legislature
85	85	LRB-3904/2
86	86	JK:skw
87	87	SECTION 3
88	88	SENATE BILL 382
89	89	An individual shall not be considered permanently and totally disabled for purposes
90	90	of this subdivision unless proof is furnished in such form and manner, and at such
91	91	times, as prescribed by the department. The exclusion under this subdivision shall
92	92	be determined as follows:
93	93	SECTION 4. 71.05 (6) (b) 54. (intro.) of the statutes is amended to read:
94	94	71.05 (6) (b) 54. (intro.) Except for a payment that is exempt under sub. (1) (a),
95	95	(am), or (an), or that is exempt as a railroad retirement benefit, and except as
96	96	provided in subds. 54m. and 54mn., for taxable years beginning after December 31,
97	97	2020, up to $5,000 of payments or distributions received each year by an individual
98	98	from a qualified retirement plan under the Internal Revenue Code or from an
99	99	individual retirement account established under 26 USC 408, if all of the following
100	100	conditions apply:
101	101	SECTION 5. 71.05 (6) (b) 54m. of the statutes is created to read:
102	102	71.05 (6) (b) 54m. Except for a payment that is exempt under sub. (1) (a), (am),
103	103	or (an), or that is exempt as a railroad retirement benefit, and except as provided
104	104	under subd. 54mn., for taxable years beginning after December 31, 2023, the
105	105	amount, as specified in subd. 54m. b., c., or d., whichever is applicable, of the
106	106	payments or distributions received each year from a qualified retirement plan under
107	107	the Internal Revenue Code or from an individual retirement account established
108	108	under 26 USC 408, if all of the following conditions apply:
109	109	a. The individual is at least 67 years of age before the close of the taxable year
110	110	to which the subtraction relates.
111	111	b. If the individual is single or files as head of household, the amount claimed
112	112	by the individual under this subdivision may not exceed $100,000 for that taxable
113	113	year.
114	114	1
115	115	2
116	116	3
117	117	4
118	118	5
119	119	6
120	120	7
121	121	8
122	122	9
123	123	10
124	124	11
125	125	12
126	126	13
127	127	14
128	128	15
129	129	16
130	130	17
131	131	18
132	132	19
133	133	20
134	134	21
135	135	22
136	136	23
137	137	24
138	138	25 - 4 -2023 - 2024 Legislature LRB-3904/2
139	139	JK:skw
140	140	SECTION 5 SENATE BILL 382
141	141	c. If the individual is married and is a joint filer, and both spouses are at least
142	142	67 years of age before the close of the taxable year to which the subtraction relates,
143	143	the amount claimed by the individual under this subdivision may not exceed
144	144	$150,000 for that taxable year.
145	145	d. If the individual is married and files a separate return, but both spouses are
146	146	at least 67 years of age before the close of the taxable year to which the subtraction
147	147	relates, the sum of the amount claimed by the spouses as a subtraction under this
148	148	subdivision may not exceed $150,000 for that taxable year.
149	149	e. The individual has not claimed any credit under s. 71.07.
150	150	SECTION 6. 71.05 (6) (b) 54mn. of the statutes is created to read:
151	151	71.05 (6) (b) 54mn. For taxable years beginning after December 31, 2023, for
152	152	an individual who is a nonresident or a part-year resident of this state, the amount
153	153	that is calculated by multiplying the applicable amount under subd. 54m. b., c., or
154	154	d. by a fraction the numerator of which is the individual's wages, salary, tips,
155	155	unearned income, and net earnings from a trade or business that are taxable by this
156	156	state and the denominator of which is the individual's total wages, salary, tips,
157	157	unearned income, and net earnings from a trade or business.
158	158	SECTION 7. 71.83 (1) (a) 6. of the statutes is amended to read:
159	159	71.83 (1) (a) 6. `Retirement plans.' Any natural person who is liable for a
160	160	penalty for federal income tax purposes under section 72 (m) (5), (q), (t), and (v), 4973,
161	161	4974, 4975, or 4980A of the Internal Revenue Code is liable for 33 percent of the
162	162	federal penalty unless the income received is exempt from taxation under s. 71.05
163	163	(1) (a) or (6) (b) 54., 54m., or 54mn. The penalties provided under this subdivision
164	164	1
165	165	2
166	166	3
167	167	4
168	168	5
169	169	6
170	170	7
171	171	8
172	172	9
173	173	10
174	174	11
175	175	12
176	176	13
177	177	14
178	178	15
179	179	16
180	180	17
181	181	18
182	182	19
183	183	20
184	184	21
185	185	22
186	186	23 - 5 -2023 - 2024 Legislature
187	187	LRB-3904/2
188	188	JK:skw
189	189	SECTION 7
190	190	SENATE BILL 382
191	191	shall be assessed, levied, and collected in the same manner as income or franchise
192	192	taxes.
193	193	(END)
194	194	1
195	195	2
196	196	3