LRB-2062/2
MES:sbb&jld:jf
2011 - 2012 LEGISLATURE
June 16, 2011 - Introduced by Representatives Pasch, Grigsby, Shilling,
Jorgensen, Vruwink, Turner, Pope-Roberts, Berceau, Endsley, Roys and
Doyle, cosponsored by Senators C. Larson, Taylor and
Lassa. Referred to
Committee on Colleges and Universities.
AB185,1,3
1An Act to amend 14.63 (4), 14.64 (3) (a) 1., 71.05 (6) (b) 28. h., 71.05 (6) (b) 32.
2(intro.) and 71.05 (6) (b) 33. (intro.) of the statutes;
relating to: authorizing
3certain individuals to contribute to a college savings plan account.
Analysis by the Legislative Reference Bureau
Under current law, there is a college tuition and expenses program, commonly
referred to as "EdVest I," under which a contributor may purchase "tuition units"
that can be used to pay qualified educational costs on behalf of a beneficiary. The
purchase of the units is limited to parents, grandparents, aunts, uncles, legal
guardians, trusts created on behalf of a beneficiary, or individuals purchasing units
for their own use. Contributions made to an account set up under the program, up
to a limit of $3,000 each year for each beneficiary, may be deducted from a
contributor's income in the calculation of his or her income taxes if the beneficiary
of the account is one of the following: the claimant; the claimant's child; the
claimant's grandchild; the claimant's great-grandchild; or the claimant's niece or
nephew.
Also, under current law, there exists a college savings program, commonly
referred to as "EdVest II," under which anyone may open an account for a prospective
student, regardless of the contributor's relationship to the beneficiary. Individuals
may open accounts for themselves, and a prospective student may be the beneficiary
of more than one college savings account. Contributions made to an account set up
under this program, up to a limit of $3,000 each year for each beneficiary, may be
deducted from a contributor's income in the calculation of his or her income taxes if
the beneficiary of the account is one of the following: the claimant; the claimant's
child; the claimant's grandchild; the claimant's great-grandchild; or the claimant's
niece or nephew.
Current law authorizes an income tax deduction for amounts contributed to
both EdVest I and EdVest II by a divorced or legally separated parent of a child. The
deduction may be claimed without regard to whether the child is his or her
dependent. The total annual deduction under these two programs, per beneficiary,
claimed by married parents who file jointly or separately, or by the divorced or legally
separated parents of a child, may not exceed $3,000. The total annual deduction
under these two programs, per beneficiary, claimed by a married person who files
separately may not exceed $1,500 per claimant. The total annual deduction under
these two programs, per beneficiary, claimed by a formerly married couple may not
exceed a total of $3,000, or $1,500 per claimant, except that the former couple's
divorce judgment may specify a different division of the $3,000 maximum that may
be claimed by each former spouse.
The only individuals who may purchase tuition units for an EdVest I account
or contribute to an EdVest II account, and receive income tax deductions for such a
purchase or contribution, are the owners of the accounts. Under this bill, an
authorized contributor to an EdVest I or EdVest II account who is not the owner of
the account may claim a tax deduction for his or her contribution, subject to the
current law limitations, if the claimant is the parent, grandparent,
great-grandparent, aunt, or uncle of the beneficiary.
Because this bill relates to an exemption from state or local taxes, it may be
referred to the Joint Survey Committee on Tax Exemptions for a report to be printed
as an appendix to the bill.
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:
AB185, s. 1
1Section
1. 14.63 (4) of the statutes is amended to read:
AB185,3,22
14.63
(4) Number of tuition units purchased. A person who enters into a
3contract under sub. (3) may purchase tuition units at any time and in any number,
4or may authorize a parent, grandparent, great-grandparent, aunt, or uncle of the
5beneficiary to purchase tuition units, except that the total number of tuition units
6purchased on behalf of a single beneficiary may not exceed the number necessary to
7cover tuition, fees and the costs of room and board, books, supplies and equipment
1required for enrollment or attendance of the beneficiary at an institution of higher
2education.
AB185, s. 2
3Section
2. 14.64 (3) (a) 1. of the statutes is amended to read:
AB185,3,64
14.64
(3) (a) 1. Contribute to a college savings account
or authorize a parent,
5grandparent, great-grandparent, aunt, or uncle of the beneficiary to contribute to
6the account.
AB185, s. 3
7Section
3. 71.05 (6) (b) 28. h. of the statutes is amended to read:
AB185,3,158
71.05
(6) (b) 28. h. No modification may be claimed under this subdivision for
9an amount paid for tuition expenses and mandatory student fees, as described under
10this subdivision, if the source of the payment is an amount withdrawn from a college
11savings account, as described in s. 14.64 or from a college tuition and expenses
12program, as described in s. 14.63, and if the owner of the account
or a parent,
13grandparent, great-grandparent, aunt, or uncle of the beneficiary, who contributed
14to the account, has claimed a deduction under subd. 32. or 33. that relates to such
15an amount.
AB185, s. 4
16Section
4. 71.05 (6) (b) 32. (intro.) of the statutes is amended to read:
AB185,3,2217
71.05
(6) (b) 32. (intro.) An amount paid into a college savings account, as
18described in s. 14.64,
by the owner of the account or by a parent, grandparent,
19great-grandparent, aunt, or uncle of the beneficiary, if the beneficiary of the account
20is one of the following: the claimant; the claimant's child; the claimant's grandchild;
21the claimant's great-grandchild; or the claimant's niece or nephew; calculated as
22follows:
AB185, s. 5
23Section
5. 71.05 (6) (b) 33. (intro.) of the statutes is amended to read:
AB185,4,424
71.05
(6) (b) 33. (intro.) An amount paid into a college tuition and expenses
25program, as described in s. 14.63,
by the owner of the account or by a parent,
1grandparent, great-grandparent, aunt, or uncle of the beneficiary, if the beneficiary
2of the account is one of the following: the claimant; the claimant's child; the
3claimant's grandchild; the claimant's great-grandchild; or the claimant's niece or
4nephew; calculated as follows:
AB185,4,96
(1) This act first applies to taxable years beginning on January 1 of the year
7in which this subsection takes effect, except that if this subsection takes effect after
8July 31 this act first applies to taxable years beginning on January 1 of the year
9following the year in which this subsection takes effect.
