Amendment ASA1-AB402

LRBs0109/1

MES:lmk:ch

2005 - 2006 LEGISLATURE

ASSEMBLY SUBSTITUTE AMENDMENT 1, TO 2005 ASSEMBLY BILL 402

May 24, 2005 - Offered by Representative Kerkman.

AB402-ASA1,1,4 An Act to renumber and amend 71.05 (6) (b) 21.; and to create 71.05 (6) (b) 21. b., 71.05 (6) (b) 21. c., 71.05 (6) (b) 21. d., 71.05 (6) (b) 21. e. and 71.05 (6) (b) 21. f. of the statutes; relating to: increasing the amount of the individual income tax subtract modification for social security benefits.

Analysis by the Legislative Reference Bureau

In general, under current law, 50 percent of certain social security benefits are taxed by this state once the recipient's income reaches $34,000 for a single individual or $44,000 for a married couple filing jointly, while the federal government taxes 85 percent of these same benefits.

Over the course of five years, beginning with 2006, this substitute amendment increases the exemption amount such that by 2010, the social security benefits which are included in the calculation of a taxpayer's federal adjusted gross income will be completely exempt from taxation. In 2006 the exemption amount is approximately 60 percent; in 2007, 70 percent; in 2008, 80 percent; in 2009, 90 percent; and in 2010 and thereafter, 100 percent.

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

AB402-ASA1, s. 1 Section 1. 71.05 (6) (b) 21. of the statutes is renumbered 71.05 (6) (b) 21. a. and amended to read:

AB402-ASA1,2,7 71.05 (6) (b) 21. a. The For taxable years beginning before January 1, 2006, the difference between the amount of social security benefits included in federal adjusted gross income for the current year and the amount calculated under section 86 of the internal revenue code Internal Revenue Code as that section existed on December 31, 1992.

AB402-ASA1, s. 2 Section 2. 71.05 (6) (b) 21. b. of the statutes is created to read:

AB402-ASA1,2,13 71.05 (6) (b) 21. b. For taxable years beginning after December 31, 2005, and before January 1, 2007, the difference between the amount of social security benefits included in federal adjusted gross income for the current year and 80 percent of the amount calculated under section 86 of the Internal Revenue Code as that section existed on December 31, 1992.

AB402-ASA1, s. 3 Section 3. 71.05 (6) (b) 21. c. of the statutes is created to read:

AB402-ASA1,2,19 71.05 (6) (b) 21. c. For taxable years beginning after December 31, 2006, and before January 1, 2008, the difference between the amount of social security benefits included in federal adjusted gross income for the current year and 60 percent of the amount calculated under section 86 of the Internal Revenue Code as that section existed on December 31, 1992.

AB402-ASA1, s. 4 Section 4. 71.05 (6) (b) 21. d. of the statutes is created to read:

AB402-ASA1,2,25 71.05 (6) (b) 21. d. For taxable years beginning after December 31, 2007, and before January 1, 2009, the difference between the amount of social security benefits included in federal adjusted gross income for the current year and 40 percent of the amount calculated under section 86 of the Internal Revenue Code as that section existed on December 31, 1992.

AB402-ASA1, s. 5 Section 5. 71.05 (6) (b) 21. e. of the statutes is created to read:

AB402-ASA1,3,6 71.05 (6) (b) 21. e. For taxable years beginning after December 31, 2008, and before January 1, 2010, the the difference between the amount of social security benefits included in federal adjusted gross income for the current year and 20 percent of the amount calculated under section 86 of the Internal Revenue Code as that section existed on December 31, 1992.

AB402-ASA1, s. 6 Section 6. 71.05 (6) (b) 21. f. of the statutes is created to read:

AB402-ASA1,3,10 71.05 (6) (b) 21. f. For taxable years beginning after December 31, 2009, the amount of social security benefits included in federal adjusted gross income under section 86 of the Internal Revenue Code.

AB402-ASA1,3,11 (End)