Amendment SSA1-SB674

2025 - 2026 LEGISLATURE

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SENATE SUBSTITUTE AMENDMENT 1, TO SENATE BILL 674

January 9, 2026 - Offered by Senator Felzkowski.

SB674-SSA1,1,2 An Act to create 71.05 (6) (a) 30. and 71.05 (6) (b) 57. of the statutes; relating to: individual income tax subtraction for losses due to financial exploitation.

Analysis by the Legislative Reference Bureau

This bill allows individuals to subtract losses from their financial accounts due to financial exploitation when calculating their income for tax purposes, beginning with taxable year 2024. Under the bill, the subtraction occurs in the taxable year in which the loss is discovered. The bill provides that financial exploitation is considered to occur if it was reported to law enforcement officials and there is no reasonable prospect of recovery of the loss through legal action, insurance claim, or other compensation.

The bill provides that the subtraction may not exceed the amount lost that was otherwise subject to tax and that no amount may be subtracted unless the withdrawal or disbursement from the account was included in gross income for federal tax purposes. The bill further provides that any amount subtracted may not be deducted or excluded from income, or claimed as a credit, under any other income tax provision.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

SB674-SSA1,1 Section 1. 71.05 (6) (a) 30. of the statutes is created to read:

SB674-SSA1,2,4 71.05 (6) (a) 30. The amount received during the taxable year that is a recovery, reimbursement, or compensation of an amount previously subtracted from income under par. (b) 57.

SB674-SSA1,2 Section 2. 71.05 (6) (b) 57. of the statutes is created to read:

SB674-SSA1,2,19 71.05 (6) (b) 57. For taxable years beginning after December 31, 2023, the amount lost from the individual’s financial account due to financial exploitation, as defined in s. 46.90 (1) (ed). The amount subtracted under this subdivision may not exceed the amount lost that was otherwise subject to tax under this subchapter, and no amount may be subtracted under this subdivision unless the withdrawal or disbursement of the lost funds from the financial account resulted in the funds being included in the individual’s gross income for federal income tax purposes. For purposes of this subdivision, financial exploitation is considered to occur if it was reported to law enforcement officials and there is no reasonable prospect of recovery of the loss through legal action, insurance claim, or other compensation. Amounts allowed under this subdivision may only be subtracted in the taxable year in which the individual discovers the loss. Any amount subtracted under this subdivision may not be deducted or excluded from income, or claimed as a credit, under any other provision in this chapter.

SB674-SSA1,2,20 (end)