AB297,6,2020
71.28
(5r) Education credit. (a) In this subsection:
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1. "Claimant" means a corporation that files a claim under this subsection.
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2. "Degree-granting program" means an education program for which an
23associate, a bachelor's, or a graduate degree is awarded upon successful completion.
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3. "Family member" has the meaning given in s. 157.061 (7).
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14. "Managing employee" means an individual who wholly or partially exercises
2operational or managerial control over, or who directly or indirectly conducts, the
3operation of the claimant's business.
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5. "Poverty line" has the meaning given under s. 49.001 (5).
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6. "Qualified postsecondary institution" means all of the following:
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a. A University of Wisconsin System institution, a technical college system
7institution, or a regionally accredited 4-year nonprofit college or university having
8its regional headquarters and principal place of business in this state.
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b. A school approved under s. 45.54 if the delivery of education occurs in this
10state.
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(b) Subject to the limitations provided in this subsection, a claimant may claim
12as a credit against the tax imposed under s. 71.23 an amount equal to the following:
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1. Fifty percent of the tuition that the claimant paid or incurred during the
14taxable year for an individual to participate in an education program of a qualified
15postsecondary institution, if the individual was enrolled in a degree-granting
16program.
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2. Seventy-five percent of the tuition that the claimant paid or incurred during
18the taxable year for an individual to participate in an education program of a
19qualified postsecondary institution, if the individual was enrolled in a
20degree-granting program and if the individual's taxable income in the year prior to
21commencing participation in the education program in connection with which a
22credit is claimed is not more than 185 percent of the poverty line.
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(c) 1. No credit may be allowed under par. (b) unless the claimant obtains
24written certification from a qualified postsecondary institution concerning the
25amount of tuition that the claimant paid or incurred during the taxable year for an
1individual to participate in an education program of the qualified postsecondary
2institution and includes a copy of the certification with the claimant's return.
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2. No credit may be allowed under par. (b) 2. unless the claimant obtains
4written certification from a qualified postsecondary institution that the taxable
5income of the individual for whom the claimant has paid or incurred tuition during
6the taxable year for the individual to participate in an education program of the
7qualified postsecondary institution is not more than 185 percent of the poverty line
8and includes a copy of the certification with the claimant's return. For purposes of
9this subdivision and par. (b) 2., if an individual for whom the claimant has paid or
10incurred tuition is claimed as a dependent on another person's tax return, the
11individual's taxable income shall be the taxable income of the person on whose return
12the individual is claimed as a dependent.
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3. No credit may be allowed under par. (b) unless the claimant certifies to the
14department of revenue that the claimant will not be reimbursed for any amount of
15tuition for which the claimant claims a credit under par. (b).
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(d) A claimant may not claim the credit under par. (b) for any tuition amounts
17that the claimant has excluded under section
127 of the Internal Revenue Code.
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(e) A claimant may not claim the credit under par. (b) for any tuition amounts
19that the claimant paid or incurred for a family member of a managing employee
20unless all of the following apply:
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1. The family member was employed an average of at least 20 hours a week as
22an employee of the claimant, or the claimant's business, during the one-year period
23prior to commencing participation in the education program in connection with
24which the claimant claims a credit under par. (b).
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12. The family member is enrolled in a degree-granting program that is
2substantially related to the claimant's business.
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3. The family member is making satisfactory progress towards completing the
4degree-granting program under subd. 2.
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(f) The carry-over provisions of sub. (4) (e) and (f), as they apply to the credit
6under sub. (4), apply to the credit under this subsection.
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(g) Partnerships, limited liability companies, and tax-option corporations may
8not claim the credit under this subsection, but the eligibility for, and the amount of,
9the credit are based on their payment of tuition under par. (b). A partnership, limited
10liability company, or tax-option corporation shall compute the amount of credit that
11each of its partners, members, or shareholders may claim and shall provide that
12information to each of them. Partners, members of limited liability companies, and
13shareholders of tax-option corporations may claim the credit in proportion to their
14ownership interest.
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(h) Subsection (4) (g) and (h), as it applies to the credit under sub. (4), applies
16to the credit under this subsection.
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(i) The department of revenue shall biennially submit a report to the legislature
18under s. 13.172 (2) that identifies each qualified postsecondary institution for which
19it has received written certification from a claimant under par. (c). The report shall
20specify the total amount of the tuition for each such institution that is claimed as a
21credit under this subsection in the previous biennium.
AB297, s. 7
22Section
7. 71.30 (3) (dm) of the statutes is created to read:
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71.30
(3) (dm) The education credit under s. 71.28 (5r).
AB297, s. 8
24Section
8. 71.34 (1) (g) of the statutes is amended to read:
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171.34
(1) (g) An addition shall be made for credits computed by a tax-option
2corporation under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (3), (3g),
3(3n), (3t),
and (5b)
, and (5r) and passed through to shareholders.
AB297, s. 9
4Section
9. 71.45 (2) (a) 10. of the statutes is amended to read:
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71.45
(2) (a) 10. By adding to federal taxable income the amount of credit
6computed under s. 71.47 (1dd) to (1dx), (3n),
and (5b)
, and (5r) and not passed
7through by a partnership, limited liability company, or tax-option corporation that
8has added that amount to the partnership's, limited liability company's, or
9tax-option corporation's income under s. 71.21 (4) or 71.34 (1) (g) and the amount of
10credit computed under s. 71.47 (1), (3), (3t), (4), and (5).
AB297, s. 10
11Section
10. 71.47 (5r) of the statutes is created to read:
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71.47
(5r) E
ducation credit. (a) In this subsection:
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1. "Claimant" means a corporation that files a claim under this subsection.
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2. "Degree-granting program" means an educational program for which an
15associate, a bachelor's, or a graduate degree is awarded upon successful completion.
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3. "Family member" has the meaning given in s. 157.061 (7).
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4. "Managing employee" means an individual who wholly or partially exercises
18operational or managerial control over, or who directly or indirectly conducts, the
19operation of the claimant's business.
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5. "Poverty line" has the meaning given under s. 49.001 (5).
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6. "Qualified postsecondary institution" means all of the following:
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a. A University of Wisconsin System institution, a technical college system
23institution, or a regionally accredited 4-year nonprofit college or university having
24its regional headquarters and principal place of business in this state.
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1b. A school approved under s. 45.54 if the delivery of education occurs in this
2state.
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(b) Subject to the limitations provided in this subsection, a claimant may claim
4as a credit against the tax imposed under s. 71.43 an amount equal to the following:
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1. Fifty percent of the tuition that the claimant paid or incurred during the
6taxable year for an individual to participate in an education program of a qualified
7postsecondary institution, if the individual was enrolled in a degree-granting
8program.
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2. Seventy-five percent of the tuition that the claimant paid or incurred during
10the taxable year for an individual to participate in an education program of a
11qualified postsecondary institution, if the individual was enrolled in a
12degree-granting program and if the individual's taxable income in the year prior to
13commencing participation in the education program in connection with which a
14credit is claimed is not more than 185 percent of the poverty line.
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(c) 1. No credit may be allowed under par. (b) unless the claimant obtains
16written certification from a qualified postsecondary institution concerning the
17amount of tuition that the claimant paid or incurred during the taxable year for an
18individual to participate in an education program of the qualified postsecondary
19institution and includes a copy of the certification with the claimant's return.
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2. No credit may be allowed under par. (b) 2. unless the claimant obtains
21written certification from a qualified postsecondary institution that the taxable
22income of the individual for whom the claimant has paid or incurred tuition during
23the taxable year for the individual to participate in an education program of the
24qualified postsecondary institution is not more than 185 percent of the poverty line
25and includes a copy of the certification with the claimant's return. For purposes of
1this subdivision and par. (b) 2., if an individual for whom the claimant has paid or
2incurred tuition is claimed as a dependent on another person's tax return, the
3individual's taxable income shall be the taxable income of the person on whose return
4the individual is claimed as a dependent.
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3. No credit maybe allowed under par. (b) unless the claimant certifies to the
6department of revenue that the claimant will not be reimbursed for any amount of
7tuition for which the claimant claims a credit under par. (b).
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(d) A claimant may not claim the credit under par. (b) for any tuition amounts
9that the claimant excluded under section
127 of the Internal Revenue Code.
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(e) A claimant may not claim the credit under par. (b) for any tuition amounts
11that the claimant paid or incurred for a family member of a managing employee
12unless all of the following apply:
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1. The family member was employed an average of at least 20 hours a week as
14an employee of the claimant, or the claimant's business, during the one-year period
15prior to commencing participation in the education program in connection with
16which the claimant claims a credit under par. (b).
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2. The family member is enrolled in a degree-granting program that is
18substantially related to the claimant's business.
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3. The family member is making satisfactory progress towards completing the
20degree-granting program under subd. 2.
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(f) The carry-over provisions of s. 71.28 (4) (e) and (f), as they apply to the credit
22under s. 71.28 (4), apply to the credit under this subsection.
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(g) Partnerships, limited liability companies, and tax-option corporations may
24not claim the credit under this subsection, but the eligibility for, and the amount of,
25the credit are based on their payment of tuition under par. (b). A partnership, limited
1liability company, or tax-option corporation shall compute the amount of credit that
2each of its partners, members, or shareholders may claim and shall provide that
3information to each of them. Partners, members of limited liability companies, and
4shareholders of tax-option corporations may claim the credit in proportion to their
5ownership interest.
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(h) Section 71.28 (4) (g) and (h), as it applies to the credit under s. 71.28 (4),
7applies to the credit under this subsection.
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(i) The department of revenue shall biennially submit a report to the legislature
9under s. 13.172 (2) that identifies each qualified postsecondary institution for which
10it has received written certification from a claimant under par. (c). The report shall
11specify the total amount of the tuition for each such institution that is claimed as a
12credit under this subsection in the previous biennium.
AB297, s. 11
13Section
11. 71.49 (1) (dm) of the statutes is created to read:
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71.49
(1) (dm) The education credit under s. 71.47 (5r).
AB297, s. 12
15Section
12. 77.92 (4) of the statutes is amended to read:
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77.92
(4) "Net business income," with respect to a partnership, means taxable
17income as calculated under section
703 of the Internal Revenue Code; plus the items
18of income and gain under section
702 of the Internal Revenue Code, including taxable
19state and municipal bond interest and excluding nontaxable interest income or
20dividend income from federal government obligations; minus the items of loss and
21deduction under section
702 of the Internal Revenue Code, except items that are not
22deductible under s. 71.21; plus guaranteed payments to partners under section
707 23(c) of the Internal Revenue Code; plus the credits claimed under s. 71.07 (2dd), (2de),
24(2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (3g), (3s), (3n), (3t),
and (5b)
, and (5r); and
25plus or minus, as appropriate, transitional adjustments, depreciation differences,
1and basis differences under s. 71.05 (13), (15), (16), (17), and (19); but excluding
2income, gain, loss, and deductions from farming. "Net business income," with respect
3to a natural person, estate, or trust, means profit from a trade or business for federal
4income tax purposes and includes net income derived as an employee as defined in
5section
3121 (d) (3) of the Internal Revenue Code.
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(1)
Education credit. This act first applies to taxable years beginning on
8January 1, 2006.