Note: This Section creates a penalty for nonqualified withdrawals from a lifelong
learning account through an addition to an individual's taxable income. The penalty does
not apply to persons 70 years of age or older.
AB294, s. 3 1Section 3. 71.05 (6) (a) 26. of the statutes is created to read:
AB294,3,52 71.05 (6) (a) 26. For taxable years beginning after December 31, 2009, the
3amount withdrawn by an individual who is 70 years of age or older at the time of the
4withdrawal, from a lifelong learning account and not used for qualified education
5expenses under s. 106.115 (2) (e) or (3) (b).
Note: This Section includes nonqualified lifelong learning account withdrawals
by an individual 70 years of age or older in the individual's taxable income.
AB294, s. 4 6Section 4. 71.05 (6) (b) 47. of the statutes is created to read:
AB294,3,107 71.05 (6) (b) 47. For taxable years beginning after December 31, 2009, for a
8participating employee, as defined in s. 106.115 (1) (e), the amount contributed
9during the taxable year by or on behalf of an individual to a lifelong learning account
10established under s. 106.115.
Note: This Section subtracts employee and employer lifelong learning account
contributions from an individual's federal adjusted gross income (AGI).
AB294, s. 5 11Section 5. 71.05 (6) (b) 48. of the statutes is created to read:
AB294,3,1612 71.05 (6) (b) 48. For taxable years beginning after December 31, 2009, any
13increase in value of a lifelong learning account established under s. 106.115, except
14that the subtraction under this subdivision may not be claimed by any individual
15who makes a withdrawal for a purpose other than for qualified education expenses
16under s. 106.115 (2) (e) or (3) (b).
Note: This Section subtracts from federal AGI any gain generated from a lifelong
learning account if the withdrawal is used for qualified education expenses.
AB294, s. 6 17Section 6. 71.05 (6) (b) 49. of the statutes is created to read:
AB294,4,318 71.05 (6) (b) 49. For taxable years beginning after December 31, 2009, for a
19participating employer, as defined in s. 106.115 (1) (f), the amount contributed by a

1participating employer to a lifelong learning account pursuant to a lifelong learning
2account plan approved under s. 106.115 (2), to the extent not otherwise subtracted
3in the computation of the employer's taxable income.
Note: This Section subtracts an employer's lifelong learning account
contributions made on behalf of the employer's employees from the employer's Wisconsin
taxable income.
AB294, s. 7 4Section 7. 71.07 (6s) of the statutes is created to read:
AB294,4,75 71.07 (6s) Lifelong learning account credit. (a) Definition. In this
6subsection, "claimant" means a participating employer, as defined in s. 106.115 (1)
7(f), who is not an individual.
AB294,4,128 (b) Filing claims. For taxable years beginning after December 31, 2009, subject
9to the limitations provided in this subsection, a claimant may claim as a credit
10against the tax imposed under s. 71.02, up to the amount of those taxes, an amount
11equal to 50 percent of the claimant's lifelong learning account contributions under
12s. 106.115 (2) (d) paid in the taxable year.
AB294,4,1413 (c) Limitations. 1. No credit may be claimed on contributions in excess of
14$1,000 per employee.
AB294,4,1615 2. The amount claimed by a claimant under par. (b) for a taxable year may not
16exceed $50,000.
AB294,5,217 3. Partnerships, limited liability companies, and tax-option corporations may
18not claim the credit under this subsection, but the eligibility for, and the amount of,
19the credit are based on their payment of amounts under par. (b). A partnership,
20limited liability company, or tax-option corporation shall compute the amount of
21credit that each of its partners, members, or shareholders may claim and shall
22provide that information to each of them. Partners, members of limited liability

1companies, and shareholders of tax-option corporations may claim the credit in
2proportion to their ownership interests.
AB294,5,53 4. No credit may be claimed under a plan in which employer matching
4contributions are less than 25 percent of the amount contributed annually by
5participating employees.
AB294,5,76 (d) Administration. The provisions of s. 71.28 (4) (e) to (h), as they apply to the
7credit under s. 71.28 (4), apply to the credit under this subsection.
Note: This Section creates a nonrefundable employer credit for employer
contributions to lifelong learning accounts. The Section grants a credit equal to 50
percent of the employer's first $1,000 contributed per employee. Employers must make
matching contributions of at least 25 percent in order to claim the credit. The Section
places a $50,000 yearly aggregate limit on the credit available to an employer. The credit
may be carried forward and credited against taxes due for the following 15 years.
AB294, s. 8 8Section 8. 71.10 (4) (cs) of the statutes is created to read:
AB294,5,99 71.10 (4) (cs) Lifelong learning account credit under s. 71.07 (6s).
AB294, s. 9 10Section 9. 71.21 (4) of the statutes, as affected by 2009 Wisconsin Act 2, is
11amended to read:
AB294,5,1512 71.21 (4) Credits computed by a partnership under s. 71.07 (2dd), (2de), (2di),
13(2dj), (2dL), (2dm), (2ds), (2dx), (2dy), (3g), (3h), (3n), (3p), (3r), (3s), (3t), (3w), (5e),
14(5f), (5g), (5h), (5i), (5j), and (5k), and (6s) and passed through to partners shall be
15added to the partnership's income.
AB294, s. 10 16Section 10. 71.26 (2) (a) 4. of the statutes, as affected by 2009 Wisconsin Act
172
, is amended to read:
AB294,6,218 71.26 (2) (a) 4. Plus the amount of the credit computed under s. 71.28 (1dd),
19(1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (1dy), (3g), (3h), (3n), (3p), (3r), (3t), (3w),
20(5e), (5f), (5g), (5h), (5i), (5j), and (5k), and (6s) and not passed through by a
21partnership, limited liability company, or tax-option corporation that has added that

1amount to the partnership's, limited liability company's, or tax-option corporation's
2income under s. 71.21 (4) or 71.34 (1k) (g).
AB294, s. 11 3Section 11. 71.26 (2) (a) 10. of the statutes is created to read:
AB294,6,84 71.26 (2) (a) 10. For taxable years beginning after December 31, 2009, for a
5participating employer, as defined in s. 106.115 (1) (f), minus the amount contributed
6by a participating employer to a lifelong learning account pursuant to a lifelong
7learning account plan approved under s. 106.115 (2), to the extent not otherwise
8subtracted in the computation of the employer's net income.
Note: This Section subtracts an employer's lifelong learning account
contributions made on behalf of the employer's employees from the employer's net
income.
AB294, s. 12 9Section 12. 71.28 (6s) of the statutes is created to read:
AB294,6,1210 71.28 (6s) Lifelong learning account credit. (a) Definition. In this
11subsection, "claimant" means a participating employer, as defined in s. 106.115 (1)
12(f).
AB294,6,1713 (b) Filing claims. For taxable years beginning after December 31, 2009, subject
14to the limitations provided in this subsection, a claimant may claim as a credit
15against the tax imposed under s. 71.23, up to the amount of those taxes, an amount
16equal to 50 percent of the claimant's lifelong learning account contributions under
17s. 106.115 (2) (d) paid in the taxable year.
AB294,6,1918 (c) Limitations. 1. No credit may be claimed on contributions in excess of
19$1,000 per employee.
AB294,6,2120 2. The amount claimed by a claimant under par. (b) for a taxable year may not
21exceed $50,000.
AB294,7,622 3. Partnerships, limited liability companies, and tax-option corporations may
23not claim the credit under this subsection, but the eligibility for, and the amount of,

1the credit are based on their payment of amounts under par. (b). A partnership,
2limited liability company, or tax-option corporation shall compute the amount of
3credit that each of its partners, members, or shareholders may claim and shall
4provide that information to each of them. Partners, members of limited liability
5companies, and shareholders of tax-option corporations may claim the credit in
6proportion to their ownership interests.
AB294,7,97 4. No credit may be claimed under a plan in which employer matching
8contributions are less than 25 percent of the amount contributed annually by
9participating employees.
AB294,7,1110 (d) Administration. The provisions of sub. (4) (e) to (h), as they apply to the
11credit under sub. (4), apply to the credit under this subsection.
Note: This Section creates a nonrefundable employer credit for employer
contributions to lifelong learning accounts. The Section grants a credit equal to 50
percent of the employer's first $1,000 contributed per employee. Employers must make
matching contributions of at least 25 percent in order to claim the credit. The Section
places a $50,000 yearly aggregate limit on the credit available to an employer. The credit
may be carried forward and credited against taxes due for the following 15 years.
AB294, s. 13 12Section 13. 71.30 (3) (dn) of the statutes is created to read:
AB294,7,1313 71.30 (3) (dn) Lifelong learning account credit under s. 71.28 (6s).
AB294, s. 14 14Section 14. 71.34 (1k) (g) of the statutes, as affected by 2009 Wisconsin Act 2,
15is amended to read:
AB294,7,1916 71.34 (1k) (g) An addition shall be made for credits computed by a tax-option
17corporation under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (1dy),
18(3), (3g), (3h), (3n), (3p), (3r), (3t), (3w), (5e), (5f), (5g), (5h), (5i), (5j), and (5k), and (6s)
19and passed through to shareholders.
AB294, s. 15 20Section 15. 71.45 (2) (a) 10. of the statutes, as affected by 2009 Wisconsin Act
212
, is amended to read:
AB294,8,7
171.45 (2) (a) 10. By adding to federal taxable income the amount of credit
2computed under s. 71.47 (1dd) to (1dy), (3h), (3n), (3p), (3r), (3w), (5e), (5f), (5g), (5h),
3(5i), (5j), and (5k), and (6s) and not passed through by a partnership, limited liability
4company, or tax-option corporation that has added that amount to the partnership's,
5limited liability company's, or tax-option corporation's income under s. 71.21 (4) or
671.34 (1k) (g) and the amount of credit computed under s. 71.47 (1), (3), (3t), (4), and
7(5).
AB294, s. 16 8Section 16. 71.45 (2) (a) 19. of the statutes is created to read:
AB294,8,149 71.45 (2) (a) 19. For taxable years beginning after December 31, 2009, for a
10participating employer, as defined in s. 106.115 (1) (f), by subtracting from federal
11taxable income the amount contributed by a participating employer to a lifelong
12learning account pursuant to a lifelong learning account plan approved under s.
13106.115 (2), to the extent not otherwise subtracted in the computation of the
14employer's net income.
Note: This Section subtracts an employer's lifelong learning account
contributions made on behalf of the employer's employees from the employer's net
income.
AB294, s. 17 15Section 17. 71.47 (6s) of the statutes is created to read:
AB294,8,1816 71.47 (6s) Lifelong learning account credit. (a) Definition. In this
17subsection, "claimant" means a participating employer, as defined in s. 106.115 (1)
18(f).
AB294,8,2319 (b) Filing claims. For taxable years beginning after December 31, 2009, subject
20to the limitations provided in this subsection, a claimant may claim as a credit
21against the tax imposed under s. 71.43, up to the amount of those taxes, an amount
22equal to 50 percent of the claimant's lifelong learning account contributions under
23s. 106.115 (2) (d) paid in the taxable year.
AB294,9,2
1(c) Limitations. 1. No credit may be claimed on contributions in excess of
2$1,000 per employee.
AB294,9,43 2. The amount claimed by a claimant under par. (b) for a taxable year may not
4exceed $50,000.
AB294,9,125 3. Partnerships, limited liability companies, and tax-option corporations may
6not claim the credit under this subsection, but the eligibility for, and the amount of,
7the credit are based on their payment of amounts under par. (b). A partnership,
8limited liability company, or tax-option corporation shall compute the amount of
9credit that each of its partners, members, or shareholders may claim and shall
10provide that information to each of them. Partners, members of limited liability
11companies, and shareholders of tax-option corporations may claim the credit in
12proportion to their ownership interests.
AB294,9,1513 4. No credit may be claimed under a plan in which employer matching
14contributions are less than 25 percent of the amount contributed annually by
15participating employees.
AB294,9,1716 (d) Administration. The provisions of s. 71.28 (4) (e) to (h), as they apply to the
17credit under s. 71.28 (4), apply to the credit under this subsection.
Note: This Section creates a nonrefundable employer credit for employer
contributions to lifelong learning accounts. The Section grants a credit equal to 50
percent of the employer's first $1,000 contributed per employee. Employers must make
matching contributions of at least 25 percent in order to claim the credit. The Section
places a $50,000 yearly aggregate limit on the credit available to an employer. The credit
may be carried forward and credited against taxes due for the following 15 years.
AB294, s. 18 18Section 18. 71.49 (1) (dn) of the statutes is created to read:
AB294,9,1919 71.49 (1) (dn) Lifelong learning account credit under s. 71.47 (6s).
AB294, s. 19 20Section 19. 77.92 (4) of the statutes, as affected by 2009 Wisconsin Act 2, is
21amended to read:
AB294,10,16
177.92 (4) "Net business income," with respect to a partnership, means taxable
2income as calculated under section 703 of the Internal Revenue Code; plus the items
3of income and gain under section 702 of the Internal Revenue Code, including taxable
4state and municipal bond interest and excluding nontaxable interest income or
5dividend income from federal government obligations; minus the items of loss and
6deduction under section 702 of the Internal Revenue Code, except items that are not
7deductible under s. 71.21; plus guaranteed payments to partners under section 707
8(c) of the Internal Revenue Code; plus the credits claimed under s. 71.07 (2dd), (2de),
9(2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (2dy), (3g), (3h), (3n), (3p), (3r), (3s), (3t),
10(3w), (5e), (5f), (5g), (5h), (5i), (5j), and (5k) , and (6s); and plus or minus, as
11appropriate, transitional adjustments, depreciation differences, and basis
12differences under s. 71.05 (13), (15), (16), (17), and (19); but excluding income, gain,
13loss, and deductions from farming. "Net business income," with respect to a natural
14person, estate, or trust, means profit from a trade or business for federal income tax
15purposes and includes net income derived as an employee as defined in section 3121
16(d) (3) of the Internal Revenue Code.
AB294, s. 20 17Section 20. 106.115 of the statutes is created to read:
AB294,10,18 18106.115 Lifelong learning accounts program. (1) In this section:
AB294,10,2019 (a) "Account" means a lifelong learning account that is approved by the
20department under sub. (3).
AB294,10,2221 (b) "Eligible employee" means an employee who is eligible to participate in a
22participating employer's plan.
AB294,10,2523 (c) "Full-time employee" means an employee who is employed by a
24participating employer to work at least 2,080 hours per year, including paid leave
25and holidays, and whose principal place of employment is in this state.
AB294,11,3
1(d) "Part-time employee" means an employee who is employed by a
2participating employer to work less than 2,080 hours per year, including paid leave
3and holidays, and whose principal place of employment is in this state.
AB294,11,54 (e) "Participating employee" means an eligible employee who participates in a
5lifelong learning accounts program under this section.
AB294,11,76 (f) "Participating employer" means an employer that participates in a lifelong
7learning accounts program under this section.
AB294,11,98 (g) "Plan" means a lifelong learning account plan that is approved by the
9department under sub. (2).
AB294,11,1710 (h) "Qualified education expenses" means expenses for tuition and fees, books,
11equipment, and tools or supplies that may be retained by a participating employee
12relating to a course of instruction provided by a postsecondary educational
13institution that is accredited to the satisfaction of the department and moneys
14transferred from a participating employee's account to the participating employee's
15account established under the plan of another participating employer. "Qualified
16education expenses" does not include expenses for meals, lodging, transportation, or
17any course or other instruction involving sports, games, or hobbies.
AB294,11,18 18(2) The department shall approve a plan that satisfies all of the following:
AB294,11,1919 (a) Is in writing.
AB294,11,2220 (b) Covers at least all full-time employees of the participating employer and,
21if the participating employer elects to cover part-time employees under the plan, all
22part-time employees.
AB294,11,2323 (c) Provides for voluntary participation by eligible employees.
AB294,12,1124 (d) 1. Establishes an account for each participating employee to which the
25participating employee makes contributions for the payment of qualified education

1expenses and the participating employer may make matching contributions for the
2payment of those expenses. A participating employer that makes matching
3contributions under this subdivision shall base those contributions on a percentage
4of a participating employee's annual contribution and shall apply the same
5percentage to each participating employee. The combined contributions of the
6participating employee and participating employer may not exceed $5,000 annually.
7A participating employee or participating employer may not make contributions to
8an account that has a balance of more than $25,000. A participating employee who
9has multiple accounts may not contribute to any account if the aggregate balance of
10all accounts is more than $25,000. The account shall be owned by the participating
11employee.
AB294,12,1412 2. a. In this subdivision, "consumer price index" means the average of the
13consumer price index for all urban consumers, U.S. city average, as determined by
14the bureau of labor statistics of the U.S. department of labor.
AB294,12,2515 b. Except as provided in this subd. 2. b., beginning on July 1, 2011, and on each
16July 1 after that, the department shall adjust the annual contribution and aggregate
17balance limits under subd. 1. by calculating the percentage difference between the
18consumer price index for the 12-month period ending on December 31 of the
19preceding year and the consumer price index for the 12-month period ending on
20December 31 of the year before the preceding year and adjusting those limits by that
21percentage difference. The department shall publish the adjusted limits calculated
22under this subd. 2. b. in the Wisconsin Administrative Register. This subd. 2. b. does
23not apply if the consumer price index for the 12-month period ending on December
2431 of the preceding year did not increase over the consumer price index for the
2512-month period ending on December 31 of the year before the preceding year.
AB294,13,3
1(e) Except as provided in sub. (5), provides that the account shall be used to pay
2qualified education expenses incurred by a participating employee for education
3selected at the sole discretion of the participating employee.
AB294,13,54 (f) Provides procedures for the dissemination of information about the plan,
5including the federal and state income tax consequences of the plan.
AB294,13,6 6(3) The department shall approve an account that satisfies all of the following:
AB294,13,77 (a) Is established and administered in accordance with a plan.
AB294,13,108 (b) Except as provided in sub. (5), is used to pay qualified education expenses
9incurred by a participating employee for education selected at the sole discretion of
10the participating employee.
AB294,13,1211 (c) Is held by a trustee or fiduciary, including the state treasurer, as approved
12by the department.
AB294,13,14 13(4) A participating employer shall provide information to the department that
14the department determines is necessary to approve a plan or account.
AB294,13,18 15(5) A participating employee may withdraw the participating employee's
16contribution to the account at any time for any purpose. If an amount is withdrawn
17for a purpose other than to pay qualified education expenses under sub. (2) (e) or (3)
18(b), the account shall incur a penalty under s. 71.05 (6) (a) 25.
AB294,13,21 19(6) The department shall establish a program to provide information to
20participating employers and eligible employees about the lifelong learning accounts
21program established under this section.
AB294,13,23 22(7) The department shall promulgate rules establishing a procedure for the
23approval of plans under sub. (2) and accounts under sub. (3).
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