LRB-3420/1
MES:jld:md
2009 - 2010 LEGISLATURE
March 29, 2010 - Introduced by Representative Hixson. Referred to Committee on
Ways and Means.
AB908,1,3
1An Act to create 71.07 (8e) and 71.10 (4) (cg) of the statutes;
relating to:
2creating a nonrefundable individual income tax credit for interest paid on
3certain student loans.
Analysis by the Legislative Reference Bureau
Under federal law, there is deduction for up to $2,500 in student loan interest
paid in the year to which the claim relates for indebtedness incurred for educational
expenses for a taxpayer, the taxpayer's spouse, or the taxpayer's dependent. This
deduction applies for Wisconsin purposes as well.
This bill creates a nonrefundable individual income tax credit for interest
payments paid by a claimant on a loan that is used for the educational expenses of
the claimant, the claimant's spouse, or the claimant's dependent. Under the bill, the
credit may be claimed for 50 percent of the interest paid by the claimant on a loan,
the proceeds of which are used to pay for tuition, fees, books, room and board, and
educational supplies that are directly related to the claimant's attendance, or the
attendance of the claimant's spouse or dependent, at a regionally accredited,
nonprofit, postsecondary educational institution.
Because the credit is nonrefundable, it may be claimed only up to the amount
of a claimant's income tax liability. The credit may not be claimed by nonresidents
or part-year residents of this state.
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:
AB908, s. 1
1Section
1. 71.07 (8e) of the statutes is created to read:
AB908,2,32
71.07
(8e) Educational interest expenses tax credit. (a)
Definitions. In this
3subsection:
AB908,2,44
1. "Claimant" means an individual who files a claim under this subsection.
AB908,2,65
2. "Dependent" means an individual who is claimed by the claimant as a
6dependent under section
151 (c) of the Internal Revenue Code
AB908,2,117
3. "Educational interest expenses" means any amount of interest paid on a
8loan, the proceeds of which are used to pay for tuition, fees, books, room and board,
9and educational supplies that are directly related to the claimant's attendance, or the
10attendance of the claimant's spouse or dependent, at an eligible educational
11institution, as defined in s. 18.81 (2).
AB908,2,1512
(b)
Filing claims. Subject to the limitations provided in this subsection, a
13claimant may claim as a credit against the tax imposed under s. 71.02, up to the
14amount of those taxes, 50 percent of the amount that the claimant pays for
15educational interest expenses in the year to which the claim relates.
AB908,2,1716
(c)
Limitations. 1. No credit may be allowed under this subsection unless it
17is claimed within the time period under s. 71.75 (2).
AB908,2,1918
2. No credit may be claimed under this subsection by a part-year resident or
19a nonresident of this state.
AB908,2,2120
(d)
Administration. Subsection (9e) (d), to the extent that it applies to the credit
21under that subsection, applies to the credit under this subsection.
AB908, s. 2
1Section
2. 71.10 (4) (cg) of the statutes is created to read:
AB908,3,22
71.10
(4) (cg) The educational interest expenses tax credit under s. 71.07 (8e).
AB908,3,74
(1) This act first applies to taxable years beginning on January 1 of the year
5in which this subsection takes effect, except that if this subsection takes effect on or
6after August 1 this act first applies to taxable years beginning on January 1 of the
7year following the year in which this subsection takes effect.
