LRB-3488/1
MES:cjs:jf
2011 - 2012 LEGISLATURE
January 5, 2012 - Introduced by Senator Grothman, cosponsored by
Representatives Thiesfeldt, Jacque, Kerkman, Pridemore, Brooks,
Spanbauer, T. Larson, Nygren, LeMahieu, Molepske Jr and Knodl. Referred
to Committee on Financial Institutions and Rural Issues.
SB364,1,3
1An Act to create 71.05 (6) (b) 48. of the statutes;
relating to: creating an
2individual income tax deduction for certain contributions to a Coverdell
3Education Savings Account.
Analysis by the Legislative Reference Bureau
This bill creates an 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:
SB364, s. 1
1Section
1. 71.05 (6) (b) 48. of the statutes is created to read:
SB364,2,52
71.05
(6) (b) 48. An amount contributed to a Coverdell Education Savings
3Account under
26 USC 530, in the taxable year to which the subtraction relates, up
4to the limits and subject to the conditions specified in
26 USC 530 (b) (1) (A) and
26
5USC 530 (c).
SB364,2,107
(1) This act first applies to taxable years beginning on January 1 of the year
8in which this subsection takes effect, except that if this subsection takes effect after
9July 31 this act first applies to taxable years beginning on January 1 of the year
10following the year in which this subsection takes effect.
