LRB-1979/1
MES:jld:rs
2013 - 2014 LEGISLATURE
March 28, 2013 - Introduced by Senator Grothman, cosponsored by
Representatives Thiesfeldt, Nass, Kestell, Kahl, Kapenga, Strachota,
Bernier, Pridemore, Jacque, Kerkman and Kaufert. Referred to Committee
on Workforce Development, Forestry, Mining, and Revenue.
SB111,1,3 1An Act to create 71.05 (6) (b) 28. i. and 71.05 (6) (b) 48. of the statutes; relating
2to:
creating an individual income tax deduction for certain contributions to a
3Coverdell Education Savings Account.
Analysis by the Legislative Reference Bureau
This bill creates an individual income tax deduction for any amount contributed
to a Coverdell Education Savings Account (CESA), in the year in which the
contribution is made, subject to the limits and conditions specified in federal law for
contributions to a CESA. Currently, the maximum allowable contribution to a CESA
is $2,000 each year per beneficiary, although that contribution amount phases down
as a contributor's modified adjusted gross income (MAGI) increases from $95,000 to
$110,000, or from $190,000 to $220,000 for a married couple filing jointly. No
contributions are allowed once a contributor's MAGI is above the phase-out range.
Under federal law, contributions to a CESA must be made in cash, are not tax
deductible, and may not be made once the beneficiary reaches the age of 18. The
accounts themselves are exempt from taxation, and the proceeds of an account must
be used for qualified education expenses, as defined under federal law, for a
designated beneficiary. Qualified education expenses include certain elementary,
secondary, and higher education expenses.
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:
SB111,1 1Section 1. 71.05 (6) (b) 28. i. of the statutes is created to read:
SB111,2,62 71.05 (6) (b) 28. i. No modification may be claimed under this subdivision for
3an amount paid for tuition expenses and mandatory student fees, as described under
4this subdivision, if the source of the payment is an amount withdrawn from a
5Coverdell Education Savings Account, as described under 26 USC 530, and for which
6a subtraction has been claimed under subd. 48.
SB111,2 7Section 2. 71.05 (6) (b) 48. of the statutes is created to read:
SB111,2,118 71.05 (6) (b) 48. An amount contributed to a Coverdell Education Savings
9Account under 26 USC 530, in the taxable year to which the subtraction relates, up
10to the limits and subject to the conditions specified in 26 USC 530 (b) (1) (A) and 26
11USC 530
(c).
SB111,3 12Section 3. Initial applicability.
SB111,2,1613 (1) This act first applies to taxable years beginning on January 1 of the year
14in which this subsection takes effect, except that if this subsection takes effect after
15July 31 this act first applies to taxable years beginning on January 1 of the year
16following the year in which this subsection takes effect.
SB111,2,1717 (End)
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