LRB-1962/1
MES:nwn:jf
2009 - 2010 LEGISLATURE
April 9, 2009 - Introduced by Senators Darling, Leibham, Hopper and Schultz,
cosponsored by Representatives
Knodl, Vos, Townsend, Gundrum, Bies,
Lothian, Kramer, Brooks, Murtha, Kleefisch, Spanbauer and Gunderson.
Referred to Committee on Health, Health Insurance, Privacy, Property Tax
Relief, and Revenue.
SB165,1,4
1An Act to renumber and amend 71.07 (6) (am) 1.;
to amend 71.07 (6) (am) 2.
2d.; and
to create 71.07 (6) (am) 1. b. and 71.07 (6) (am) 2. e. of the statutes;
3relating to: changing the type of income that may be used to calculate the
4married persons tax credit.
Analysis by the Legislative Reference Bureau
Generally, under current law, married persons filing a joint income tax return
may claim as a credit against Wisconsin income taxes otherwise due an amount equal
to 3 percent of the earned income of the spouse with the lower earned income, but not
more than $480. Because this tax credit is nonrefundable, it may be claimed only up
to the amount of income taxes otherwise due.
Under the bill, the credit that may be claimed is an amount equal to 3 percent
of the sum of the earned income and retirement income of the spouse with the lower
earned income but not more than $480. The bill defines retirement income as
payments or distributions received by an individual from a qualified retirement plan
under the Internal Revenue Code or an individual retirement account.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB165, s. 1
1Section
1. 71.07 (6) (am) 1. of the statutes is renumbered 71.07 (6) (am) 1.
2(intro.) and amended to read:
SB165,2,33
71.07
(6) (am) 1. In this paragraph
, "earned:
SB165,2,14
4a. "Earned income" means qualified earned income, as defined in section
221 5(b) of the
internal revenue code Internal Revenue Code as amended to December 31,
61985, plus employee business expenses under section 62 (2) (B) to (D) of that code,
7allocable to Wisconsin under s. 71.04, plus amounts received by the individual for
8services performed in the employ of the individual's spouse minus the amount of
9disability income excluded under s. 71.05 (6) (b) 4. and minus any other amount not
10subject to tax under this chapter. Earned income is computed notwithstanding the
11fact that each spouse owns an undivided one-half interest in the whole of the marital
12property. A marital property agreement or unilateral statement under ch. 766
13transferring income between spouses has no effect in computing earned income
14under this paragraph.
SB165, s. 2
15Section
2. 71.07 (6) (am) 1. b. of the statutes is created to read:
SB165,2,2316
71.07
(6) (am) 1. b. "Retirement income" means any payment or distribution
17received each year by an individual from a qualified retirement plan under the
18Internal Revenue Code or from an individual retirement account established under
1926 USC 408. Retirement income is computed notwithstanding the fact that each
20spouse owns an undivided one-half interest in the whole of the marital property. A
21marital property agreement or unilateral statement under ch. 766 transferring
22income between spouses has no effect in computing earned income under this
23paragraph.
SB165, s. 3
24Section
3. 71.07 (6) (am) 2. d. of the statutes is amended to read:
SB165,3,3
171.07
(6) (am) 2. d. For taxable years beginning after December 31, 2000,
and
2before January 1, 2009, 3% of the earned income of the spouse with the lower earned
3income, but not more than $480.
SB165, s. 4
4Section
4. 71.07 (6) (am) 2. e. of the statutes is created to read:
SB165,3,75
71.07
(6) (am) 2. e. For taxable years beginning after December 31, 2008, 3
6percent of the sum of the earned income and retirement income of the spouse with
7the lower earned income, but not more than $480.
