LRB-0600/P1
JK:klm
2021 - 2022 LEGISLATURE
DOA:......Quinn, BB0183 - Medical Care Insurance Subtraction for Self-Employed Individuals
For 2021-2023 Budget -- Not Ready For Introduction
An Act ...; relating to: the budget.
Analysis by the Legislative Reference Bureau
Taxation
Income taxation
Medical care insurance subtraction
This bill modifies the income tax subtraction for amounts paid for medical care insurance by self-employed individuals. Under current law, the subtraction may not exceed the individual's net earnings from a trade or business that are taxable by Wisconsin. Under the bill, the subtraction may not exceed the individual's wages, salary, tips, unearned income, and net earnings from a trade or business that are taxable by Wisconsin.
The bill similarly modifies the provision under current law that prorates the subtraction for self-employed nonresidents and part-year residents based on the percentage of the individual's net earnings from a trade or business taxable by Wisconsin to total net earnings from a trade or business. Under the bill, the subtraction is prorated based on the percentage of the individual's wages, salary, tips, unearned income, and net earnings from a trade or business that are taxable by Wisconsin to total wages, salary, tips, unearned income, and net earnings from a trade or business. The bill also eliminates obsolete provisions related to the medical care insurance subtraction for self-employed individuals.
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:
Section
1. 71.05 (6) (b) 17. of the statutes is repealed.
Section
2. 71.05 (6) (b) 18. of the statutes is repealed.
Section 3
. 71.05 (6) (b) 19. c. of the statutes is amended to read:
71.05 (6) (b) 19. c. For taxable years beginning before January 1, 2021, for a person who is a nonresident or a part-year resident of this state, modify the amount calculated under subd. 19. b. by multiplying the amount by a fraction the numerator of which is the person's net earnings from a trade or business that are taxable by this state and the denominator of which is the person's total net earnings from a trade or business.
Section 4
. 71.05 (6) (b) 19. cm. of the statutes is created to read:
71.05 (6) (b) 19. cm. For taxable years beginning after December 31, 2020, for a person who is a nonresident or a part-year resident of this state, modify the amount calculated under subd. 19. b. by multiplying the amount by a fraction the numerator of which is the person's wages, salary, tips, unearned income, and net earnings from a trade or business that are taxable by this state and the denominator of which is the person's total wages, salary, tips, unearned income, and net earnings from a trade or business. In this subd. 19. cm., for married persons filing separately, “
wages, salary, tips, unearned income, and net earnings from a trade or business" means the separate wages, salary, tips, unearned income, and net earnings from a trade or business of each spouse, and for married persons filing jointly, “
wages, salary, tips, unearned income, and net earnings from a trade or business" means the total wages, salary, tips, unearned income, and net earnings from a trade or business of both spouses.
Section 5
. 71.05 (6) (b) 19. d. of the statutes is amended to read:
71.05 (6) (b) 19. d. Reduce
For taxable years beginning before January 1, 2021, reduce the amount calculated under subd. 19. b. or c. to the person's aggregate net earnings from a trade or business that are taxable by this state.
Section 6
. 71.05 (6) (b) 19. dm. of the statutes is created to read:
71.05 (6) (b) 19. dm. For taxable years beginning after December 31, 2020, reduce the amount calculated under subd. 19.b. or cm. to the person's aggregate wages, salary, tips, unearned income, and net earnings from a trade or business that are taxable by this state.
Section 7
. 71.05 (6) (b) 20. of the statutes is repealed.
Section 8
. 71.05 (6) (b) 36. of the statutes is repealed.
Section 9
. 71.05 (6) (b) 37. of the statutes is repealed.
Section 10
. 71.05 (6) (b) 39. of the statutes is repealed.
Section 11
. 71.05 (6) (b) 40. of the statutes is repealed.
Section 12
. 71.05 (6) (b) 41. of the statutes is repealed.
Section 13
. 71.07 (5) (a) 15. of the statutes is amended to read:
71.07
(5) (a) 15. The amount claimed as a deduction for medical care insurance under section
213 of the Internal Revenue Code that is exempt from taxation under s. 71.05 (6) (b)
17. to 20 19., 35.,
36., 37., 38.,
39., 40., 41., and 42. and the amount claimed as a deduction for a long-term care insurance policy under section
213 (d) (1) (D) of the Internal Revenue Code, as defined in section
7702B (b) of the Internal Revenue Code that is exempt from taxation under s. 71.05 (6) (b) 26.
(End)
