LRB-1365/1
MES:nwn:rs
2009 - 2010 LEGISLATURE
March 11, 2009 - Introduced by Senators Lassa, Kreitlow, Taylor, Darling,
Holperin, Lehman, Erpenbach, Plale, Grothman, Olsen
and Kedzie,
cosponsored by Representatives Molepske Jr., Cullen, Roys, Suder, Berceau,
Nass, Pope-Roberts, Bies, Vos, Zepnick, Kestell
and Fields. Referred to
Committee on Veterans and Military Affairs, Biotechnology, and Financial
Institutions.
SB106,1,6 1An Act to amend 71.05 (6) (b) 32. (intro.), 71.05 (6) (b) 32. a., 71.05 (6) (b) 33.
2(intro.) and 71.05 (6) (b) 33. a. of the statutes; relating to: allowing an
3individual income tax deduction for certain amounts contributed by a divorced
4or legally separated parent to his or her child's college savings account or college
5tuition and expenses program and limiting the deduction that may be claimed
6by a married person who files separately.
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 and the
claimant's dependent under the Internal Revenue Code; 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 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 and the claimant's dependent under the Internal Revenue Code; the claimant's
grandchild; the claimant's great-grandchild; or the claimant's niece or nephew.
Under this bill, an income tax deduction for amounts contributed to both
EdVest I and EdVest II may be claimed 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.
Currently, the total amount for which a deduction may be claimed under EdVest
I and EdVest II, per beneficiary, by any claimant, may not exceed $3,000 each year
and, in the case of a married couple filing a joint return, the total annual deduction
under these two programs, per beneficiary, claimed by the married couple may not
exceed $3,000.
Under the bill, 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 the bill, 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 the bill, 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.
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:
SB106, s. 1 1Section 1. 71.05 (6) (b) 32. (intro.) of the statutes is amended to read:
SB106,3,22 71.05 (6) (b) 32. (intro.) An amount paid into a college savings account, as
3described in s. 14.64, if the beneficiary of the account is one of the following: the
4claimant; the claimant's child and the claimant's dependent who is claimed under
5section 151 (c) of the Internal Revenue Code
; the claimant's grandchild; the

1claimant's great-grandchild; or the claimant's niece or nephew; calculated as
2follows:
SB106, s. 2 3Section 2. 71.05 (6) (b) 32. a. of the statutes is amended to read:
SB106,3,164 71.05 (6) (b) 32. a. An amount equal to not more than $3,000 per beneficiary,
5by each contributor, or $1,500 by each contributor who is married and files
6separately,
to an account for each year to which the claim relates, except that the total
7amount for which a deduction may be claimed under this subdivision and under
8subd. 33., per beneficiary by any claimant may not exceed $3,000 each year, or $1,500
9each year by any claimant who is married and files separately
. In the case of a
10married couple filing a joint return, the total deduction under this subdivision and
11under subd. 33., per beneficiary by the married couple may not exceed $3,000 each
12year. In the case of divorced parents, the total deduction under this subdivision and
13under subd. 33., per beneficiary by the formerly married couple, may not exceed
14$3,000, and the maximum amount that may be deducted by each former spouse is
15$1,500, unless the divorce judgment specifies a different division of the $3,000
16maximum that may be claimed by each former spouse.
SB106, s. 3 17Section 3. 71.05 (6) (b) 33. (intro.) of the statutes is amended to read:
SB106,3,2318 71.05 (6) (b) 33. (intro.) An amount paid into a college tuition and expenses
19program, as described in s. 14.63, if the beneficiary of the account is one of the
20following: the claimant; the claimant's child and the claimant's dependent who is
21claimed under section 151 (c) of the Internal Revenue Code
; the claimant's
22grandchild; the claimant's great-grandchild; or the claimant's niece or nephew;
23calculated as follows:
SB106, s. 4 24Section 4. 71.05 (6) (b) 33. a. of the statutes is amended to read:
SB106,4,13
171.05 (6) (b) 33. a. An amount equal to not more than $3,000 per beneficiary,
2by each contributor, or $1,500 by each contributor who is married and files
3separately,
to an account for each year to which the claim relates, except that the total
4amount for which a deduction may be claimed under this subdivision and under
5subd. 32., per beneficiary by any claimant may not exceed $3,000 each year, or $1,500
6each year by any claimant who is married and files separately
. In the case of a
7married couple filing a joint return, the total deduction under this subdivision and
8under subd. 32., per beneficiary by the married couple may not exceed $3,000 each
9year. In the case of divorced parents, the total deduction under this subdivision and
10under subd. 32., per beneficiary by the formerly married couple, may not exceed
11$3,000, and the maximum amount that may be deducted by each former spouse is
12$1,500, unless the divorce judgment specifies a different division of the $3,000
13maximum that may be claimed by each former spouse.
SB106, s. 5 14Section 5. Initial applicability.
SB106,4,1815 (1) This act first applies to taxable years beginning on January 1 of the year
16in which this subsection takes effect, except that if this subsection takes effect after
17July 31, this act first applies to taxable years beginning on January 1 of the year
18following the year in which this subsection takes effect.
SB106,4,1919 (End)
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