AB84: Bill Text

Under the bill, and subject to a number of limitations and conditions, a claimant may claim a credit equal to 25 percent of the claimant's earned income that he or she receives in the year to which the claim relates. The maximum credit that may be claimed each year by each claimant is $2,500. Once a claimant's earned income exceeds $15,000, the maximum credit that may be claimed is phased down. No credit may be claimed by an individual whose earned income exceeds $31,666. To be eligible to claim the credit, an individual must be at least 18 years old for the entire year to which the claim relates and the individual may not have been claimed as a dependent for federal income tax purposes on another individual's tax return. The credit may not be claimed by nonresidents or part-year residents of the 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:

AB84,1 Section 1. 20.835 (2) (cb) of the statutes is created to read:

AB84,2,3 20.835 (2) (cb) Additional earned income tax credit. A sum sufficient to pay the claims approved under s. 71.07 (9g).

AB84,2 Section 2. 71.07 (9e) (af) (intro.) of the statutes is amended to read:

AB84,2,10 71.07 (9e) (af) (intro.) For taxable years beginning after December 31, 1995, and before January 1, 2011, and for taxable years beginning after December 31, 2014, any natural person may credit against the tax imposed under s. 71.02 an amount equal to one of the following percentages of the federal basic earned income credit for which the person is eligible for the taxable year under section 32 (b) (1) (A) to (C) of the Internal Revenue Code:

AB84,3 Section 3. 71.07 (9e) (aj) (intro.) of the statutes is amended to read:

AB84,2,16 71.07 (9e) (aj) (intro.) For taxable years beginning after December 31, 2010, and before January 1, 2015, an individual may credit against the tax imposed under s. 71.02 an amount equal to one of the following percentages of the federal basic earned income credit for which the person is eligible for the taxable year under section 32 (b) (1) (A) to (C) of the Internal Revenue Code:

AB84,4 Section 4. 71.07 (9g) of the statutes is created to read:

AB84,3,2 71.07 (9g) Additional earned income tax credit. (a) Definitions. In this subsection:

AB84,3,3 1. "Claimant" means an individual who claims the credit under this subsection.

AB84,3,5 2. "Earned income" has the meaning given in section 32 (c) (2) of the Internal Revenue Code.

AB84,3,14 (b) Filing claims. Subject to the limitations and conditions provided in this subsection, a claimant may claim as a credit against the tax imposed under s. 71.02 or 71.08 an amount equal to 25 percent of the claimant's earned income that he or she receives in the taxable year to which the claim relates, and if the allowable amount of the claim exceeds the income taxes otherwise due on the claimant's income, the amount of the claim not used as an offset against those taxes shall be certified by the department of revenue to the department of administration for payment to the claimant by check, share draft, or other draft drawn from the appropriation account under s. 20.835 (2) (cb).

AB84,3,17 (c) Limitations and conditions. 1. To be eligible to claim a credit under this subsection, all of the following must apply to an individual who files a claim under this subsection:

AB84,3,18 a. He or she is at least 18 years old for the entire year to which the claim relates.

AB84,3,19 b. He or she received earned income in the year to which the claim relates.

AB84,3,21 c. He or she has not been claimed as a dependent for federal income tax purposes by another individual for the taxable year to which the claim relates.

AB84,3,23 2. No credit may be claimed under this subsection by a part-year resident or a nonresident of this state.

AB84,3,25 3. No credit may be allowed under this subsection unless it is claimed within the time period under s. 71.75 (2).

AB84,4,3 4. No credit may be allowed under this subsection for a taxable year covering a period of less than 12 months, except for a taxable year closed by reason of the death of the taxpayer.

AB84,4,5 5. The maximum credit that may be claimed each taxable year under this subsection by a claimant is $2,500, except as provided in subds. 6. and 7.

AB84,4,8 6. If a claimant's earned income in the taxable year to which the claim relates exceeds $15,000, the maximum credit that a claimant may claim under this subsection shall be calculated as follows:

AB84,4,10 a. Subtract $15,000 from the claimant's earned income in the taxable year to which the claim relates.

AB84,4,11 b. Multiply the amount obtained under subd. 6. a. by 15 percent.

AB84,4,13 c. Subtract the amount obtained under subd. 6. b. from $2,500 to determine the maximum allowable credit for the claimant.

AB84,4,15 7. An individual may not claim the credit under this subsection if his or her earned income exceeds $31,666 in the taxable year to which the claim relates.

AB84,4,17 (d) Administration. Subsection (9e) (d), to the extent that it applies to the credit under that subsection, applies to the credit under this subsection.

AB84,5 Section 5. 71.08 (1) (intro.) of the statutes is amended to read:

AB84,5,3 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), (2dy), (3m), (3n), (3p), (3q), (3r), (3rm), (3rn), (3s), (3t), (3w), (4k), (5b), (5d), (5e), (5f), (5h), (5i), (5j), (5n), (6), (6e), (8r), (9e), (9g), (9m), and (9r), 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1dy), (2m), (3), (3n), (3t), and (3w), 71.47 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1dy), (2m), (3), (3n), (3t), and (3w), 71.57 to 71.61, and 71.613 and subch. VIII 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:

AB84,6 Section 6. 71.10 (4) (i) of the statutes is amended to read:

AB84,5,17 71.10 (4) (i) The total of claim of right credit under s. 71.07 (1), farmland preservation credit under ss. 71.57 to 71.61, farmland preservation credit, 2010 and beyond under s. 71.613, homestead credit under subch. VIII, farmland tax relief credit under s. 71.07 (3m), dairy manufacturing facility investment credit under s. 71.07 (3p), jobs tax credit under s. 71.07 (3q), meat processing facility investment credit under s. 71.07 (3r), woody biomass harvesting and processing credit under s. 71.07 (3rm), food processing plant and food warehouse investment credit under s. 71.07 (3rn), film production services credit under s. 71.07 (5f), film production company investment credit under s. 71.07 (5h), veterans and surviving spouses property tax credit under s. 71.07 (6e), enterprise zone jobs credit under s. 71.07 (3w), beginning farmer and farm asset owner tax credit under s. 71.07 (8r), earned income tax credit under s. 71.07 (9e), additional earned income tax credit under s. 71.07 (9g), estimated tax payments under s. 71.09, and taxes withheld under subch. X.

AB84,7 Section 7. Initial applicability.

AB84,5,24 (1) The treatment of sections 20.835 (2) (cb), 71.07 (9g), 71.08 (1) (intro.), and 71.10 (4) (i) of the statutes 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 the treatment of sections 20.835 (2) (cb), 71.07 (9g), 71.08 (1) (intro.), and 71.10 (4) (i) of the statutes first applies to taxable years beginning on January 1 of the year following the year in which this subsection takes effect.

AB84,5,25 (End)