2003 - 2004 LEGISLATURE
March 11, 2004 - Introduced by Representatives Black, Richards, Berceau,
Sinicki, Miller, Plouff, J. Lehman and Pocan, cosponsored by Senators
Risser, Carpenter and Chvala. Referred to Committee on Rules.
1An Act to create
71.07 (6e) and 71.10 (4) (ce) of the statutes; relating to:
2creating a nonrefundable individual income tax credit for certain expenses
3related to child or dependent care.
Analysis by the Legislative Reference Bureau
Under current federal law there is an individual income tax credit for a portion
of qualifying child or dependent care expenses that are paid for the purpose of
enabling a taxpayer to be gainfully employed. An eligible claimant must maintain
a household for a "qualifying individual," which is defined as a dependent under the
age of 13, a disabled spouse, or another disabled individual who is a dependent of the
taxpayer. The federal credit is nonrefundable, meaning that no refund is paid if the
amount of the credit exceeds the taxpayer's tax liability. Generally, the maximum
credit is $1,050 if the taxpayer has one qualifying individual and his or her federal
adjusted gross income (FAGI) is less than $15,000; or the maximum credits is $2,100
if the taxpayer has more than one qualifying individual and his or her FAGI is less
than $15,000. The maximum credit is phased down as the taxpayer's FAGI increases
such that, generally, for a taxpayer with FAGI above $43,000, the maximum credit
is $600 for an individual with one qualifying and the maximum credit is $1,200 if the
taxpayer has more than one qualifying individual.
This bill creates a nonrefundable individual income tax credit that is equal to
50% of the amount that is claimed by an individual under this federal credit.
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:
AB966, s. 1
71.07 (6e) of the statutes is created to read:
71.07 (6e) Child and dependent care expenses credit.
. In this 3
1. "Claimant" means an individual who is eligible for, and claims, the federal 5
2. "Federal credit" means the federal tax credit, for expenses for household and 7
dependent care services necessary for gainful employment, under section 21
of the 8
Internal Revenue Code.
(b) Filing claims
. Subject to the limitations provided in this subsection, a 10
claimant may claim as a credit against the tax imposed under s. 71.02, up to the 11
amount of those taxes, an amount equal to 50% of the amount of the credit claimed 12
by the claimant under the federal credit in the year to which the claim relates.
. 1. No credit may be allowed under this subsection unless it 14
is claimed within the time period under s. 71.75 (2).
2. For a claimant who is a nonresident or part-year resident of this state and 16
who is a single person or a married person filing a separate return, multiply the 17
credit for which the claimant is eligible under par. (b) by a fraction the numerator of 18
which is the individual's Wisconsin adjusted gross income and the denominator of 19
which is the individual's federal adjusted gross income. If a claimant is married and 20
files a joint return, and if the claimant or the claimant's spouse, or both, are 21
nonresidents or part-year residents of this state, multiply the credit for which the
claimant is eligible under par. (b) by a fraction the numerator of which is the couple's 2
joint Wisconsin adjusted gross income and the denominator of which is the couple's 3
joint federal adjusted gross income.
. Subsection (9e) (d), to the extent that it applies to the credit 5
under that subsection, applies to the credit under this subsection.
AB966, s. 2
71.10 (4) (ce) of the statutes is created to read:
(ce) The child and dependent care expenses credit under s. 71.07 (6e).
(1) This act first applies to taxable years beginning on January 1 of the year 10
in which this subsection takes effect, except that if this subsection takes effect after 11
July 31 this act first applies to taxable years beginning on January 1 of the year 12
following the year in which this subsection takes effect.