June 2, 2009 - Introduced by Joint Legislative Council. Referred to Committee
on Workforce Development.
AB294,1,9 1An Act to amend 71.05 (6) (a) 15., 71.21 (4), 71.26 (2) (a) 4., 71.34 (1k) (g), 71.45
2(2) (a) 10. and 77.92 (4); and to create 71.05 (6) (a) 25., 71.05 (6) (a) 26., 71.05
3(6) (b) 47., 71.05 (6) (b) 48., 71.05 (6) (b) 49., 71.07 (6s), 71.10 (4) (cs), 71.26 (2)
4(a) 10., 71.28 (6s), 71.30 (3) (dn), 71.45 (2) (a) 19., 71.47 (6s), 71.49 (1) (dn) and
5106.115 of the statutes; relating to: a lifelong learning accounts program and
6creating income tax modifications and an income tax credit for contributions
7and withdrawals related to lifelong learning accounts, providing an exemption
8from rule-making procedures, and requiring the exercise of rule-making
9authority.
Analysis by the Legislative Reference Bureau
This bill is explained in the Notes provided by the Joint Legislative Council in
the bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:

Joint Legislative Council prefatory note: This bill was prepared for the Joint
Legislative Council's Special Committee on Building Wisconsin's Workforce.
This bill creates a lifelong learning accounts program. Under the program, a
lifelong learning accounts plan, and the accounts established and administered under the
plan, must be approved by the Department of Workforce Development (DWD).
Under the program, a participating employee makes contributions to his or her
lifelong learning account and a participating employer may make matching contributions
to that account, but must make matching contributions of at least 25 percent of the
amount contributed annually by the employer's participating employees in order to be
eligible for the lifelong learning tax credit created under the bill. A participating
employer that makes matching contributions must base those contributions on a
percentage of a participating employee's annual contribution and must apply the same
percentage to each participating employee. The combined contributions of the employer
and employee may not exceed $5,000 annually, as indexed for inflation, and contributions
may not be made to an account with a balance in excess of $25,000, as indexed for
inflation.
Employee and employer contributions may be subtracted from the employee's or
employer's taxable income, respectively. An employer may claim a nonrefundable income
tax credit for certain contributions to the lifelong learning accounts of its employees if the
employer matches at least 25 percent of the amount contributed annually by the
employer's participating employees. The account must be used to pay for qualified
education expenses. If a withdrawal from the account is made for any other purpose, the
holder of the account incurs a penalty, unless the holder is 70 years of age or older, in
which case the withdrawal is taxed as ordinary income.
AB294, s. 1 1Section 1. 71.05 (6) (a) 15. of the statutes, as affected by 2009 Wisconsin Act
22
, is amended to read:
AB294,2,83 71.05 (6) (a) 15. The amount of the credits computed under s. 71.07 (2dd), (2de),
4(2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (2dy), (3g), (3h), (3n), (3p), (3r), (3s), (3t),
5(3w), (5e), (5f), (5h), (5i), (5j), and (5k), and (6s) and not passed through by a
6partnership, limited liability company, or tax-option corporation that has added that
7amount to the partnership's, company's, or tax-option corporation's income under s.
871.21 (4) or 71.34 (1k) (g).
AB294, s. 2 9Section 2. 71.05 (6) (a) 25. of the statutes is created to read:
AB294,2,1310 71.05 (6) (a) 25. For taxable years beginning after December 31, 2009, an
11amount equal to 200 percent of the amount withdrawn by an individual, who is less
12than 70 years of age at the time of the withdrawal, from a lifelong learning account
13and not used for qualified education expenses under s. 106.115 (2) (e) or (3) (b).

Note: This Section creates a penalty for nonqualified withdrawals from a lifelong
learning account through an addition to an individual's taxable income. The penalty does
not apply to persons 70 years of age or older.
AB294, s. 3 1Section 3. 71.05 (6) (a) 26. of the statutes is created to read:
AB294,3,52 71.05 (6) (a) 26. For taxable years beginning after December 31, 2009, the
3amount withdrawn by an individual who is 70 years of age or older at the time of the
4withdrawal, from a lifelong learning account and not used for qualified education
5expenses under s. 106.115 (2) (e) or (3) (b).
Note: This Section includes nonqualified lifelong learning account withdrawals
by an individual 70 years of age or older in the individual's taxable income.
AB294, s. 4 6Section 4. 71.05 (6) (b) 47. of the statutes is created to read:
AB294,3,107 71.05 (6) (b) 47. For taxable years beginning after December 31, 2009, for a
8participating employee, as defined in s. 106.115 (1) (e), the amount contributed
9during the taxable year by or on behalf of an individual to a lifelong learning account
10established under s. 106.115.
Note: This Section subtracts employee and employer lifelong learning account
contributions from an individual's federal adjusted gross income (AGI).
AB294, s. 5 11Section 5. 71.05 (6) (b) 48. of the statutes is created to read:
AB294,3,1612 71.05 (6) (b) 48. For taxable years beginning after December 31, 2009, any
13increase in value of a lifelong learning account established under s. 106.115, except
14that the subtraction under this subdivision may not be claimed by any individual
15who makes a withdrawal for a purpose other than for qualified education expenses
16under s. 106.115 (2) (e) or (3) (b).
Note: This Section subtracts from federal AGI any gain generated from a lifelong
learning account if the withdrawal is used for qualified education expenses.
AB294, s. 6 17Section 6. 71.05 (6) (b) 49. of the statutes is created to read:
AB294,4,318 71.05 (6) (b) 49. For taxable years beginning after December 31, 2009, for a
19participating employer, as defined in s. 106.115 (1) (f), the amount contributed by a

1participating employer to a lifelong learning account pursuant to a lifelong learning
2account plan approved under s. 106.115 (2), to the extent not otherwise subtracted
3in the computation of the employer's taxable income.
Note: This Section subtracts an employer's lifelong learning account
contributions made on behalf of the employer's employees from the employer's Wisconsin
taxable income.
AB294, s. 7 4Section 7. 71.07 (6s) of the statutes is created to read:
AB294,4,75 71.07 (6s) Lifelong learning account credit. (a) Definition. In this
6subsection, "claimant" means a participating employer, as defined in s. 106.115 (1)
7(f), who is not an individual.
AB294,4,128 (b) Filing claims. For taxable years beginning after December 31, 2009, subject
9to the limitations provided in this subsection, a claimant may claim as a credit
10against the tax imposed under s. 71.02, up to the amount of those taxes, an amount
11equal to 50 percent of the claimant's lifelong learning account contributions under
12s. 106.115 (2) (d) paid in the taxable year.
AB294,4,1413 (c) Limitations. 1. No credit may be claimed on contributions in excess of
14$1,000 per employee.
AB294,4,1615 2. The amount claimed by a claimant under par. (b) for a taxable year may not
16exceed $50,000.
AB294,5,217 3. Partnerships, limited liability companies, and tax-option corporations may
18not claim the credit under this subsection, but the eligibility for, and the amount of,
19the credit are based on their payment of amounts under par. (b). A partnership,
20limited liability company, or tax-option corporation shall compute the amount of
21credit that each of its partners, members, or shareholders may claim and shall
22provide that information to each of them. Partners, members of limited liability

1companies, and shareholders of tax-option corporations may claim the credit in
2proportion to their ownership interests.
AB294,5,53 4. No credit may be claimed under a plan in which employer matching
4contributions are less than 25 percent of the amount contributed annually by
5participating employees.
AB294,5,76 (d) Administration. The provisions of s. 71.28 (4) (e) to (h), as they apply to the
7credit under s. 71.28 (4), apply to the credit under this subsection.
Note: This Section creates a nonrefundable employer credit for employer
contributions to lifelong learning accounts. The Section grants a credit equal to 50
percent of the employer's first $1,000 contributed per employee. Employers must make
matching contributions of at least 25 percent in order to claim the credit. The Section
places a $50,000 yearly aggregate limit on the credit available to an employer. The credit
may be carried forward and credited against taxes due for the following 15 years.
AB294, s. 8 8Section 8. 71.10 (4) (cs) of the statutes is created to read:
AB294,5,99 71.10 (4) (cs) Lifelong learning account credit under s. 71.07 (6s).
AB294, s. 9 10Section 9. 71.21 (4) of the statutes, as affected by 2009 Wisconsin Act 2, is
11amended to read:
AB294,5,1512 71.21 (4) Credits computed by a partnership under s. 71.07 (2dd), (2de), (2di),
13(2dj), (2dL), (2dm), (2ds), (2dx), (2dy), (3g), (3h), (3n), (3p), (3r), (3s), (3t), (3w), (5e),
14(5f), (5g), (5h), (5i), (5j), and (5k), and (6s) and passed through to partners shall be
15added to the partnership's income.
AB294, s. 10 16Section 10. 71.26 (2) (a) 4. of the statutes, as affected by 2009 Wisconsin Act
172
, is amended to read:
AB294,6,218 71.26 (2) (a) 4. Plus the amount of the credit computed under s. 71.28 (1dd),
19(1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (1dy), (3g), (3h), (3n), (3p), (3r), (3t), (3w),
20(5e), (5f), (5g), (5h), (5i), (5j), and (5k), and (6s) and not passed through by a
21partnership, limited liability company, or tax-option corporation that has added that

1amount to the partnership's, limited liability company's, or tax-option corporation's
2income under s. 71.21 (4) or 71.34 (1k) (g).
AB294, s. 11 3Section 11. 71.26 (2) (a) 10. of the statutes is created to read:
AB294,6,84 71.26 (2) (a) 10. For taxable years beginning after December 31, 2009, for a
5participating employer, as defined in s. 106.115 (1) (f), minus the amount contributed
6by a participating employer to a lifelong learning account pursuant to a lifelong
7learning account plan approved under s. 106.115 (2), to the extent not otherwise
8subtracted in the computation of the employer's net income.
Note: This Section subtracts an employer's lifelong learning account
contributions made on behalf of the employer's employees from the employer's net
income.
AB294, s. 12 9Section 12. 71.28 (6s) of the statutes is created to read:
AB294,6,1210 71.28 (6s) Lifelong learning account credit. (a) Definition. In this
11subsection, "claimant" means a participating employer, as defined in s. 106.115 (1)
12(f).
AB294,6,1713 (b) Filing claims. For taxable years beginning after December 31, 2009, subject
14to the limitations provided in this subsection, a claimant may claim as a credit
15against the tax imposed under s. 71.23, up to the amount of those taxes, an amount
16equal to 50 percent of the claimant's lifelong learning account contributions under
17s. 106.115 (2) (d) paid in the taxable year.
AB294,6,1918 (c) Limitations. 1. No credit may be claimed on contributions in excess of
19$1,000 per employee.
AB294,6,2120 2. The amount claimed by a claimant under par. (b) for a taxable year may not
21exceed $50,000.
AB294,7,622 3. Partnerships, limited liability companies, and tax-option corporations may
23not claim the credit under this subsection, but the eligibility for, and the amount of,

1the credit are based on their payment of amounts under par. (b). A partnership,
2limited liability company, or tax-option corporation shall compute the amount of
3credit that each of its partners, members, or shareholders may claim and shall
4provide that information to each of them. Partners, members of limited liability
5companies, and shareholders of tax-option corporations may claim the credit in
6proportion to their ownership interests.
AB294,7,97 4. No credit may be claimed under a plan in which employer matching
8contributions are less than 25 percent of the amount contributed annually by
9participating employees.
AB294,7,1110 (d) Administration. The provisions of sub. (4) (e) to (h), as they apply to the
11credit under sub. (4), apply to the credit under this subsection.
Note: This Section creates a nonrefundable employer credit for employer
contributions to lifelong learning accounts. The Section grants a credit equal to 50
percent of the employer's first $1,000 contributed per employee. Employers must make
matching contributions of at least 25 percent in order to claim the credit. The Section
places a $50,000 yearly aggregate limit on the credit available to an employer. The credit
may be carried forward and credited against taxes due for the following 15 years.
AB294, s. 13 12Section 13. 71.30 (3) (dn) of the statutes is created to read:
AB294,7,1313 71.30 (3) (dn) Lifelong learning account credit under s. 71.28 (6s).
AB294, s. 14 14Section 14. 71.34 (1k) (g) of the statutes, as affected by 2009 Wisconsin Act 2,
15is amended to read:
AB294,7,1916 71.34 (1k) (g) An addition shall be made for credits computed by a tax-option
17corporation under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (1dy),
18(3), (3g), (3h), (3n), (3p), (3r), (3t), (3w), (5e), (5f), (5g), (5h), (5i), (5j), and (5k), and (6s)
19and passed through to shareholders.
AB294, s. 15 20Section 15. 71.45 (2) (a) 10. of the statutes, as affected by 2009 Wisconsin Act
212
, is amended to read:
AB294,8,7
171.45 (2) (a) 10. By adding to federal taxable income the amount of credit
2computed under s. 71.47 (1dd) to (1dy), (3h), (3n), (3p), (3r), (3w), (5e), (5f), (5g), (5h),
3(5i), (5j), and (5k), and (6s) and not passed through by a partnership, limited liability
4company, or tax-option corporation that has added that amount to the partnership's,
5limited liability company's, or tax-option corporation's income under s. 71.21 (4) or
671.34 (1k) (g) and the amount of credit computed under s. 71.47 (1), (3), (3t), (4), and
7(5).
AB294, s. 16 8Section 16. 71.45 (2) (a) 19. of the statutes is created to read:
AB294,8,149 71.45 (2) (a) 19. For taxable years beginning after December 31, 2009, for a
10participating employer, as defined in s. 106.115 (1) (f), by subtracting from federal
11taxable income the amount contributed by a participating employer to a lifelong
12learning account pursuant to a lifelong learning account plan approved under s.
13106.115 (2), to the extent not otherwise subtracted in the computation of the
14employer's net income.
Note: This Section subtracts an employer's lifelong learning account
contributions made on behalf of the employer's employees from the employer's net
income.
AB294, s. 17 15Section 17. 71.47 (6s) of the statutes is created to read:
AB294,8,1816 71.47 (6s) Lifelong learning account credit. (a) Definition. In this
17subsection, "claimant" means a participating employer, as defined in s. 106.115 (1)
18(f).
AB294,8,2319 (b) Filing claims. For taxable years beginning after December 31, 2009, subject
20to the limitations provided in this subsection, a claimant may claim as a credit
21against the tax imposed under s. 71.43, up to the amount of those taxes, an amount
22equal to 50 percent of the claimant's lifelong learning account contributions under
23s. 106.115 (2) (d) paid in the taxable year.
AB294,9,2
1(c) Limitations. 1. No credit may be claimed on contributions in excess of
2$1,000 per employee.
AB294,9,43 2. The amount claimed by a claimant under par. (b) for a taxable year may not
4exceed $50,000.
AB294,9,125 3. Partnerships, limited liability companies, and tax-option corporations may
6not claim the credit under this subsection, but the eligibility for, and the amount of,
7the credit are based on their payment of amounts under par. (b). A partnership,
8limited liability company, or tax-option corporation shall compute the amount of
9credit that each of its partners, members, or shareholders may claim and shall
10provide that information to each of them. Partners, members of limited liability
11companies, and shareholders of tax-option corporations may claim the credit in
12proportion to their ownership interests.
AB294,9,1513 4. No credit may be claimed under a plan in which employer matching
14contributions are less than 25 percent of the amount contributed annually by
15participating employees.
AB294,9,1716 (d) Administration. The provisions of s. 71.28 (4) (e) to (h), as they apply to the
17credit under s. 71.28 (4), apply to the credit under this subsection.
Note: This Section creates a nonrefundable employer credit for employer
contributions to lifelong learning accounts. The Section grants a credit equal to 50
percent of the employer's first $1,000 contributed per employee. Employers must make
matching contributions of at least 25 percent in order to claim the credit. The Section
places a $50,000 yearly aggregate limit on the credit available to an employer. The credit
may be carried forward and credited against taxes due for the following 15 years.
AB294, s. 18 18Section 18. 71.49 (1) (dn) of the statutes is created to read:
AB294,9,1919 71.49 (1) (dn) Lifelong learning account credit under s. 71.47 (6s).
AB294, s. 19 20Section 19. 77.92 (4) of the statutes, as affected by 2009 Wisconsin Act 2, is
21amended to read:
AB294,10,16
177.92 (4) "Net business income," with respect to a partnership, means taxable
2income as calculated under section 703 of the Internal Revenue Code; plus the items
3of income and gain under section 702 of the Internal Revenue Code, including taxable
4state and municipal bond interest and excluding nontaxable interest income or
5dividend income from federal government obligations; minus the items of loss and
6deduction under section 702 of the Internal Revenue Code, except items that are not
7deductible under s. 71.21; plus guaranteed payments to partners under section 707
8(c) of the Internal Revenue Code; plus the credits claimed under s. 71.07 (2dd), (2de),
9(2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (2dy), (3g), (3h), (3n), (3p), (3r), (3s), (3t),
10(3w), (5e), (5f), (5g), (5h), (5i), (5j), and (5k) , and (6s); and plus or minus, as
11appropriate, transitional adjustments, depreciation differences, and basis
12differences under s. 71.05 (13), (15), (16), (17), and (19); but excluding income, gain,
13loss, and deductions from farming. "Net business income," with respect to a natural
14person, estate, or trust, means profit from a trade or business for federal income tax
15purposes and includes net income derived as an employee as defined in section 3121
16(d) (3) of the Internal Revenue Code.
AB294, s. 20 17Section 20. 106.115 of the statutes is created to read:
AB294,10,18 18106.115 Lifelong learning accounts program. (1) In this section:
AB294,10,2019 (a) "Account" means a lifelong learning account that is approved by the
20department under sub. (3).
AB294,10,2221 (b) "Eligible employee" means an employee who is eligible to participate in a
22participating employer's plan.
AB294,10,2523 (c) "Full-time employee" means an employee who is employed by a
24participating employer to work at least 2,080 hours per year, including paid leave
25and holidays, and whose principal place of employment is in this state.
AB294,11,3
1(d) "Part-time employee" means an employee who is employed by a
2participating employer to work less than 2,080 hours per year, including paid leave
3and holidays, and whose principal place of employment is in this state.
AB294,11,54 (e) "Participating employee" means an eligible employee who participates in a
5lifelong learning accounts program under this section.
AB294,11,76 (f) "Participating employer" means an employer that participates in a lifelong
7learning accounts program under this section.
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