SB74: Bill Text

LRB-2214/1

MES:cmh&jlg:ijs

1999 - 2000 LEGISLATURE

1999 Senate BILL 74

March 4, 1999 - Introduced by Senators Robson, Baumgart, Plache, Risser, Erpenbach and Clausing, cosponsored by Representatives Black, Powers, Carpenter, Sinicki, J. Lehman, Ryba, Bock, Hasenohrl, Pocan, Lassa, Meyer, Schooff, Cullen and Plouff. Referred to Committee on Economic Development, Housing and Government Operations.

SB74,1,3 An Act to amend 71.08 (1) (intro.); and to create 71.07 (6m) and 71.10 (4) (cm) of the statutes; relating to: creating a nonrefundable individual income tax credit for certain expenses related to child or dependent care.

Analysis by the Legislative Reference Bureau

Under current federal law there is an individual income tax credit for a portion of qualifying child or dependent care expenses that are paid for the purpose of enabling a taxpayer to be gainfully employed. An eligible claimant must maintain a household for a "qualifying individual", which is defined as a dependent under the age of 13, a disabled spouse or another disabled individual who is a dependent of the taxpayer. The federal credit is nonrefundable, meaning that no refund is paid if the amount of the credit exceeds the taxpayer's tax liability. The maximum credit is $720 if the taxpayer has one qualifying individual or $1,440 if the taxpayer has more than one qualifying individual.

This bill creates a nonrefundable individual income tax credit that is equal to 50% of the amount that is claimed by an individual under this federal credit.

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:

SB74, s. 1 Section 1. 71.07 (6m) of the statutes is created to read:

SB74,2,3 71.07 (6m) Child and dependent care expenses credit. (a) Definitions. In this subsection:

SB74,2,5 1. "Claimant" means an individual who is eligible for, and claims, the federal credit.

SB74,2,8 2. "Federal credit" means the federal tax credit, for expenses for household and dependent care services necessary for gainful employment, under section 21 of the Internal Revenue Code.

SB74,2,12 (b) Filing claims. Subject to the limitations provided in this subsection, a claimant may claim as a credit against the tax imposed under s. 71.02, up to the amount of those taxes, an amount equal to 50% of the amount of the credit claimed by the claimant under the federal credit in the year to which the claim relates.

SB74,2,14 (c) Limitations. 1. No credit may be allowed under this subsection unless it is claimed within the time period under s. 71.75 (2).

SB74,3,2 2. For a claimant who is a nonresident or part-year resident of this state, multiply the credit for which the claimant is eligible under par. (b) by a fraction the numerator of which is the individual'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 individual's total wages, salary, tips, unearned income and net earnings from a trade or business. In this subdivision, 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.

SB74,3,4 (d) Administration. Section 71.07 (9e) (d), to the extent that it applies to the credit under that subsection, applies to the credit under this subsection.

SB74, s. 2 Section 2. 71.08 (1) (intro.) of the statutes is amended to read:

SB74,3,14 71.08 (1) Imposition. (intro.) If the tax imposed on a natural person, married couple filing jointly, trust or estate under s. 71.02, not considering the credits under ss. 71.07 (1), (2dd), (2de), (2di), (2dj), (2dL), (2dr), (2ds), (2dx), (2fd), (3m), (3s), (6), (6m) and (9e), 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1fd), (2m) and (3) and 71.47 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1fd), (2m) and (3) and subchs. VIII and IX and payments to other states under s. 71.07 (7), is less than the tax under this section, there is imposed on that natural person, married couple filing jointly, trust or estate, instead of the tax under s. 71.02, an alternative minimum tax computed as follows:

SB74, s. 3 Section 3. 71.10 (4) (cm) of the statutes is created to read:

SB74,3,17 71.10 (4) (cm) The child and dependent expenses care credit under s. 71.07 (6m).

SB74, s. 4 Section 4. Initial applicability.

SB74,3,22 (1) This act first applies to taxable years beginning on January 1 of the year in which this subsection takes effect, except that if this subsection takes effect after July 31, this act first applies to taxable years beginning on January 1 of the year following the year in which this subsection takes effect.

SB74,3,23 (End)