LRBs0416/1
MES:jld
2017 - 2018 LEGISLATURE
SENATE SUBSTITUTE AMENDMENT 3,
TO SENATE BILL 798
March 20, 2018 - Offered by Senators Shilling, Bewley, Hansen, Larson,
Schachtner, Johnson, Vinehout, Carpenter, Erpenbach, Risser, Ringhand,
Miller and L. Taylor.
SB798-SSA3,1,3 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
This substitute amendment creates a nonrefundable individual income tax
credit for certain expenses for household and dependent care services, based on a
similar federal credit.
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 age 12 or under; 2) a child age 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 substitute amendment creates a nonrefundable individual income tax
credit based on the federal tax credit for expenses for household and dependent care
services. Under the substitute amendment, 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 substitute amendment, the Wisconsin credit may not
be claimed by a part-year or nonresident of this state.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB798-SSA3,1 1Section 1. 71.07 (8m) of the statutes is created to read:
SB798-SSA3,2,32 71.07 (8m) Additional household and dependent care expenses tax credit.
3(a) Definitions. In this subsection:
SB798-SSA3,2,64 1. “Claimant" means an individual who is eligible for and claims the household
5and dependent care expenses tax credit for the taxable year to which the claim under
6this subsection relates.
SB798-SSA3,2,87 2. “Household and dependent care expenses tax credit" means the tax credit
8under section 21 of the Internal Revenue Code.
SB798-SSA3,2,149 (b) Filing claims. Subject to the limitations provided in this subsection, a
10claimant may claim as a credit against the tax imposed under s. 71.02, up to the
11amount of those taxes, an amount equal to the amount of the household and
12dependent care expenses tax credit that the taxpayer claimed on his or her federal
13income tax return for the taxable year to which the claim under this subsection
14relates.
SB798-SSA3,3,2
1(c) Limitations. 1. No credit may be allowed under this subsection unless it
2is claimed within the time period under s. 71.75 (2).
SB798-SSA3,3,53 2. No credit may be allowed under this subsection for a taxable year covering
4a period of less than 12 months, except for a taxable year closed by reason of the death
5of the taxpayer.
SB798-SSA3,3,76 3. The credit under this subsection may not be claimed by either a part-year
7resident or nonresident of this state.
SB798-SSA3,3,98 (d) Administration. Subsection (9e) (d), to the extent that it applies to the credit
9under that subsection, applies to the credit under this subsection.
SB798-SSA3,2 10Section 2. 71.10 (4) (cs) of the statutes is created to read:
SB798-SSA3,3,1211 71.10 (4) (cs) Additional household and dependent care expenses tax credit
12under s. 71.07 (8m).
SB798-SSA3,3 13Section 3. Initial applicability.
SB798-SSA3,3,1714 (1) This act first applies to taxable years beginning on January 1 of the year
15in which this subsection takes effect, except that if this subsection takes effect after
16July 31 this act first applies to taxable years beginning on January 1 of the year
17following the year in which this subsection takes effect.
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