Wisconsin 2023-2024 Regular Session

Wisconsin Senate Bill SB978 Compare Versions

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

Old	New	Differences
1	1	LRB-5675/1
2	2	JK:cdc&emw
3	3	2023 - 2024 LEGISLATURE
4	4	2023 SENATE BILL 978
5	5	January 30, 2024 - Introduced by Senators C ABRAL-GUEVARA, WIMBERGER,
6	6	BALLWEG, BRADLEY, JAGLER, FELZKOWSKI, FEYEN, MARKLEIN, NASS, QUINN,
7	7	STROEBEL, TESTIN and WANGGAARD, cosponsored by Representatives STEFFEN,
8	8	KITCHENS, ALLEN, ARMSTRONG, AUGUST, BEHNKE, BINSFELD, BORN, BRANDTJEN,
9	9	DITTRICH, DONOVAN, EDMING, GOEBEN, GREEN, GUNDRUM, HURD, KATSMA, KRUG,
10	10	KURTZ, MACCO, MAGNAFICI, MAXEY, MELOTIK, MOSES, MURPHY, MURSAU, MYERS,
11	11	NEDWESKI, O'CONNOR, OLDENBURG, PENTERMAN, PETRYK, PLUMER, RETTINGER,
12	12	SCHMIDT, SCHRAA, SCHUTT, SNYDER, SORTWELL, SPIROS, TRANEL, WICHGERS and
13	13	WITTKE. Referred to Joint Committee on Finance.
14	14	*AUTHORS SUBJECT TO CHANGE*
15	15	AN ACT to amend 71.05 (1) (am), 71.05 (1) (an), 71.05 (6) (b) 4. (intro.), 71.05 (6)
16	16	(b) 54. (intro.) and 71.83 (1) (a) 6.; and to create 71.05 (6) (b) 54m. and 71.05
17	17	(6) (b) 54mn. of the statutes; relating to: increasing and expanding the
18	18	retirement income subtraction.
19	19	Analysis by the Legislative Reference Bureau
20	20	This bill increases and expands the individual state income tax subtraction for
21	21	payments or distributions received from qualified retirement plans under the
22	22	Internal Revenue Code or from certain individual retirement accounts. Under the
23	23	bill, beginning in tax year 2024, up to $75,000 of payments or distributions received
24	24	from qualified retirement plans or certain individual retirement accounts may be
25	25	subtracted annually from an individual's taxable income, if the individual is at least
26	26	65 years of age. If the individual and individual's spouse are both at least 65 years
27	27	of age, the sum of the amount that the couple may subtract annually from their
28	28	combined taxable income may not exceed $150,000.
29	29	Under current law, up to $5,000 of payments or distributions received by
30	30	certain individuals from qualified retirement plans or from certain individual
31	31	retirement accounts may be subtracted. To be eligible, the individual must be at least
32	32	65 years old and have federal adjusted gross income under $15,000, or under $30,000
33	33	if married.
34	34	Because this bill relates to an exemption from state or local taxes, it may be
35	35	referred to the Joint Survey Committee on Tax Exemptions for a report to be printed
36	36	as an appendix to the bill.
37	37	1
38	38	2
39	39	3
40	40	4 - 2 -2023 - 2024 Legislature LRB-5675/1
41	41	JK:cdc&emw
42	42	SENATE BILL 978
43	43	For further information see the state fiscal estimate, which will be printed as
44	44	an appendix to this bill.
45	45	The people of the state of Wisconsin, represented in senate and assembly, do
46	46	enact as follows:
47	47	SECTION 1. 71.05 (1) (am) of the statutes is amended to read:
48	48	71.05 (1) (am) Military retirement systems. All retirement payments received
49	49	from the U.S. military employee retirement system, to the extent that such payments
50	50	are not exempt under par. (a) or sub. (6) (b) 54.
51	51	SECTION 2. 71.05 (1) (an) of the statutes is amended to read:
52	52	71.05 (1) (an) Uniformed services retirement benefits. All retirement payments
53	53	received from the U.S. government that relate to service with the coast guard, the
54	54	commissioned corps of the national oceanic and atmospheric administration, or the
55	55	commissioned corps of the public health service, to the extent that such payments are
56	56	not exempt under par. (a) or (am) or sub. (6) (b) 54.
57	57	SECTION 3. 71.05 (6) (b) 4. (intro.) of the statutes is amended to read:
58	58	71.05 (6) (b) 4. (intro.) Disability payments other than disability payments that
59	59	are paid from a retirement plan, the payments from which are exempt under subd.
60	60	54. and sub. (1) (am) and (an), if the individual either is single or is married and files
61	61	a joint return and is under 65 years of age before the close of the taxable year to which
62	62	the subtraction relates, retired on disability, and, when the individual retired, was
63	63	permanently and totally disabled. In this subdivision, “permanently and totally
64	64	disabled" means an individual who is unable to engage in any substantial gainful
65	65	activity by reason of any medically determinable physical or mental impairment that
66	66	can be expected to result in death or which has lasted or can be expected to last for
67	67	a continuous period of not less than 12 months. An individual shall not be considered
68	68	1
69	69	2
70	70	3
71	71	4
72	72	5
73	73	6
74	74	7
75	75	8
76	76	9
77	77	10
78	78	11
79	79	12
80	80	13
81	81	14
82	82	15
83	83	16
84	84	17
85	85	18
86	86	19
87	87	20
88	88	21 - 3 -2023 - 2024 Legislature
89	89	LRB-5675/1
90	90	JK:cdc&emw
91	91	SECTION 3
92	92	SENATE BILL 978
93	93	permanently and totally disabled for purposes of this subdivision unless proof is
94	94	furnished in such form and manner, and at such times, as prescribed by the
95	95	department. The exclusion under this subdivision shall be determined as follows:
96	96	SECTION 4. 71.05 (6) (b) 54. (intro.) of the statutes is amended to read:
97	97	71.05 (6) (b) 54. (intro.) Except for a payment that is exempt under sub. (1) (a),
98	98	(am), or (an), or that is exempt as a railroad retirement benefit, and except as
99	99	provided under subds. 54m. and 54mn., for taxable years beginning after December
100	100	31, 2020, up to $5,000 of payments or distributions received each year by an
101	101	individual from a qualified retirement plan under the Internal Revenue Code or from
102	102	an individual retirement account established under 26 USC 408, if all of the
103	103	following conditions apply:
104	104	SECTION 5. 71.05 (6) (b) 54m. of the statutes is created to read:
105	105	71.05 (6) (b) 54m. a. Except for a payment that is exempt under sub. (1) (a),
106	106	(am), or (an), or that is exempt as a railroad retirement benefit, and except as
107	107	provided under subd. 54mn., for taxable years beginning after December 31, 2023,
108	108	the amount, up to the limit specified in subd. 54m. b., c., or d., whichever is
109	109	applicable, of the payments or distributions received each year from a qualified
110	110	retirement plan under the Internal Revenue Code or from an individual retirement
111	111	account established under 26 USC 408.
112	112	b. If the individual is at least 65 years of age before the close of the taxable year
113	113	to which the subtraction relates, the amount claimed by the individual under this
114	114	subdivision may not exceed $75,000 for that taxable year.
115	115	c. If the individual is married and is a joint filer, and both spouses are at least
116	116	65 years of age before the close of the taxable year to which the subtraction relates,
117	117	1
118	118	2
119	119	3
120	120	4
121	121	5
122	122	6
123	123	7
124	124	8
125	125	9
126	126	10
127	127	11
128	128	12
129	129	13
130	130	14
131	131	15
132	132	16
133	133	17
134	134	18
135	135	19
136	136	20
137	137	21
138	138	22
139	139	23
140	140	24 - 4 -2023 - 2024 Legislature LRB-5675/1
141	141	JK:cdc&emw
142	142	SECTION 5 SENATE BILL 978
143	143	the total amount claimed by the spouses 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 and is at least 65 years
146	146	of age before the close of the taxable year to which the subtraction relates, the
147	147	amount claimed by each spouse as a subtraction under this subdivision may not
148	148	exceed $75,000 for that taxable year.
149	149	e. The individual has not claimed any credit listed under s. 71.10 (4) for the
150	150	same taxable year for which the individual claimed the subtraction under this
151	151	subdivision.
152	152	SECTION 6. 71.05 (6) (b) 54mn. of the statutes is created to read:
153	153	71.05 (6) (b) 54mn. For taxable years beginning after December 31, 2023, for
154	154	an individual who is a part-year resident of this state, the amount that is calculated
155	155	by multiplying the applicable amount under subd. 54m. b., c., or d. by a fraction the
156	156	numerator of which is the individual's wages, salary, tips, unearned income, and net
157	157	earnings from a trade or business that are taxable by this state and the denominator
158	158	of which is the individual's total wages, salary, tips, unearned income, and net
159	159	earnings from a trade or business. A nonresident of this state is not eligible to claim
160	160	the subtraction under subd. 54m.
161	161	SECTION 7. 71.83 (1) (a) 6. of the statutes is amended to read:
162	162	71.83 (1) (a) 6. `Retirement plans.' Any natural person who is liable for a
163	163	penalty for federal income tax purposes under section 72 (m) (5), (q), (t), and (v), 4973,
164	164	4974, 4975, or 4980A of the Internal Revenue Code is liable for 33 percent of the
165	165	federal penalty unless the income received is exempt from taxation under s. 71.05
166	166	(1) (a) or (6) (b) 54., 54m., or 54mn. The penalties provided under this subdivision
167	167	1
168	168	2
169	169	3
170	170	4
171	171	5
172	172	6
173	173	7
174	174	8
175	175	9
176	176	10
177	177	11
178	178	12
179	179	13
180	180	14
181	181	15
182	182	16
183	183	17
184	184	18
185	185	19
186	186	20
187	187	21
188	188	22
189	189	23
190	190	24 - 5 -2023 - 2024 Legislature
191	191	LRB-5675/1
192	192	JK:cdc&emw
193	193	SECTION 7
194	194	SENATE BILL 978
195	195	shall be assessed, levied, and collected in the same manner as income or franchise
196	196	taxes.
197	197	(END)
198	198	1
199	199	2
200	200	3