2013 - 2014 LEGISLATURE
February 11, 2014 - Introduced by Representatives Sargent, Genrich, Johnson,
Barnes, C. Taylor, Goyke, Sinicki, Berceau, Wachs, Kahl, Zamarripa,
Ohnstad, Hebl, Pope, Shankland, Young and Riemer, cosponsored by
Senators L. Taylor, Wirch, Harris and Lassa. Referred to Committee on Ways
1An Act to create
71.07 (8m) and 71.10 (4) (cs) of the statutes; relating to:
2creating a nonrefundable individual income tax credit based on the federal tax
3credit for certain expenses for household and dependent care services.
Analysis by the Legislative Reference Bureau
Under current federal law, there exists a tax credit for expenses for household
and dependent care services necessary for gainful employment. Generally, the
federal credit is a nonrefundable individual income tax credit that may be claimed
by an individual for employment-related expenses for household services and
dependent care services for a qualifying individual. Because the credit is
nonrefundable, it may be claimed only up to the amount of a taxpayer's tax liability.
Generally, under federal law, a qualifying individual is someone who has the
same principal place of abode as the claimant for more than one-half the year, is the
claimant's dependent, and is: 1) a child 12 or under; 2) a child 13 or older who is
incapable of self-care; or 3) the claimant's spouse who is incapable of self-care.
The credit may be claimed for expenses to enable the claimant to be gainfully
employed or actively search for gainful employment. Generally, allowable expenses
for a qualifying individual under federal law include costs for in-home care or
daycare, nursery school or preschool programs, and before-school and after-school
care for school-age children. Depending on the claimant's adjusted gross income, the
credit may be worth between 20 percent and 35 percent of the claimant's allowable
expenses, up to a maximum annual amount of $3,000 if there is one qualifying
individual and up to $6,000 if there are two or more qualifying individuals.
This bill creates a nonrefundable individual income tax credit based on the
federal tax credit for expenses for household and dependent care services. Under the
bill, an individual who is eligible for and claims the federal tax credit for expenses
for household and dependent care services may claim the same amount as a
nonrefundable credit on his or her Wisconsin income tax return. Under the bill, the
Wisconsin credit may not be claimed by a part-year or nonresident of this state.
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:
71.07 (8m) of the statutes is created to read:
71.07 (8m) Additional household and dependent care expenses tax credit. 3
In this subsection:
1. "Claimant" means an individual who is eligible for and claims the household 5
and dependent care expenses tax credit for the taxable year to which the claim under 6
this subsection relates.
2. "Household and dependent care expenses tax credit" means the tax credit 8
under section 21
of the 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 the amount of the household and 12
dependent care expenses tax credit that the taxpayer claimed on his or her federal 13
income tax return for the taxable year to which the claim under this subsection 14
1. No credit may be allowed under this subsection unless it 16
is claimed within the time period under s. 71.75 (2).
2. No credit may be allowed under this subsection for a taxable year covering 2
a period of less than 12 months, except for a taxable year closed by reason of the death 3
of the taxpayer.
3. The credit under this subsection may not be claimed by either a part-year 5
resident or nonresident of this state.
Subsection (9e) (d), to the extent that it applies to the credit 7
under that subsection, applies to the credit under this subsection.
71.10 (4) (cs) of the statutes is created to read:
(cs) Additional household and dependent care expenses tax credit 10
under s. 71.07 (8m).
(1) This act first applies to taxable years beginning on January 1 of the year 13
in which this subsection takes effect, except that if this subsection takes effect after 14
July 31 this act first applies to taxable years beginning on January 1 of the year 15
following the year in which this subsection takes effect.