LRB-1605/1
MES:jld:pg
2007 - 2008 LEGISLATURE
March 8, 2007 - Introduced by Senators Roessler, Darling, S. Fitzgerald,
Harsdorf, Kedzie, A. Lasee, Lazich, Leibham
and Olsen, cosponsored by
Representatives Hahn, Albers, Bies, Gunderson, Gundrum, Jeskewitz,
Mursau, Musser, Owens, Vos
and Wood. Referred to Joint Survey Committee
on Tax Exemptions.
SB87,1,3 1An Act to create 71.05 (6) (b) 39. of the statutes; relating to: creating an
2individual income tax subtract modification for medical care insurance costs
3paid by certain individuals who are employed by other persons.
Analysis by the Legislative Reference Bureau
Under current law, there is an individual income tax deduction for 100 percent
of the amount paid by a person for a medical care insurance policy that covers the
person, his or her spouse, and the person's dependents if the person's employer pays
no amount of money toward the person's medical care insurance. Also under current
law, a similar deduction exists for 100 percent of such amounts paid for a medical care
insurance policy by a self-employed person. A similar deduction also exists under
current law for approximately 33 percent of such amounts paid for a medical care
insurance policy by a person who has no employer and no self-employment income,
although this percentage will increase to 100 percent for taxable years beginning
after December 31, 2008.
This bill creates an individual income tax deduction for 100 percent of the
amount that is paid by an individual for a medical care insurance policy that covers
the individual, his or her spouse, and the individual's dependents if the individual's
employer pays a portion of the cost of the individual's policy.
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:
SB87, s. 1 1Section 1. 71.05 (6) (b) 39. of the statutes is created to read:
SB87,2,62 71.05 (6) (b) 39. For taxable years beginning after December 31, 2006, an
3amount paid by an individual who is the employee of another person, if the
4individual's employer pays a portion of the cost of the individual's medical care
5insurance, for medical care insurance for the individual, his or her spouse, and the
6individual's dependents, calculated as follows:
SB87,2,157 a. One hundred percent of the amount paid by the individual for medical care
8insurance. In this subdivision, "medical care insurance" means a medical care
9insurance policy that covers the individual, his or her spouse, and the individual's
10dependents and provides surgical, medical, hospital, major medical, or other health
11service coverage, and includes payments made for medical care benefits under a
12self-insured plan, but "medical care insurance" does not include hospital indemnity
13policies or policies with ancillary benefits such as accident benefits or benefits for loss
14of income resulting from a total or partial inability to work because of illness,
15sickness, or injury.
SB87,2,1816 b. From the amount calculated under subd. 39. a., subtract the amounts
17deducted from gross income for medical care insurance in the calculation of federal
18adjusted gross income.
SB87,3,919 c. For an individual who is a nonresident or part-year resident of this state,
20multiply the amount calculated under subd. 39. a. or b., by a fraction the numerator
21of which is the individual's wages, salary, tips, unearned income, and net earnings

1from a trade or business that are taxable by this state and the denominator of which
2is the individual's total wages, salary, tips, unearned income, and net earnings from
3a trade or business. In this subd. 39. c., for married persons filing separately "wages,
4salary, tips, unearned income, and net earnings from a trade or business" means the
5separate wages, salary, tips, unearned income, and net earnings from a trade or
6business of each spouse, and for married persons filing jointly "wages, salary, tips,
7unearned income, and net earnings from a trade or business" means the total wages,
8salary, tips, unearned income, and net earnings from a trade or business of both
9spouses.
SB87,3,1210 d. Reduce the amount calculated under subd. 39. a., b., or c. to the individual's
11aggregate wages, salary, tips, unearned income, and net earnings from a trade or
12business that are taxable by this state.
SB87,3,1313 (End)
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