Vote Smart's Synopsis:

Vote to pass a bill that increases education funding and repeals income taxes for qualified tips and overtime in Wisconsin.

Highlights:

• Establishes a surplus refund payment fund (Sec. 1).

• Appropriates $50 million for the surplus refund payment in 2027 and annually thereafter (Sec. 2).

• Extends federal section 224 Internal Revenue Code deductions to Wisconsin state tax payers for taxable years beginning after December 31, 2025 (Sec. 3).

• Limits the section 224 deductions for part-year residents and nonresidents of Wisconsin to a fraction of their qualified tips that are taxable by the state divided by their total qualified tips (Sec. 3).

• Authorizes the continuation of section 224 deductions in Wisconsin past December 31, 2028 if the Internal Revenue Code does not continue it on the federal level (Sec. 3).

• Extends federal section 225 Internal Revenue Code deductions to Wisconsin state tax payers for taxable years beginning after December 31, 2025 (Sec. 4).

• Limits the section 225 deductions for part-year residents and nonresidents of Wisconsin to a fraction of their qualified overtime pay that is taxable by the state divided by their total qualified overtime pay (Sec. 4).

• Authorizes the continuation of section 225 deductions in Wisconsin past December 31, 2028 if the Internal Revenue Code does not continue it on the federal level (Sec. 4).

• Specifies that 40% percent of a school district's summer enrollment is factored into the official number of pupils enrolled (Sec. 6).

• Amends the definition of “income” to include any amount subtracted under the qualified tips and overtime pay deductions from the previous sections (Sec. 8).

• Defines “state aid” as the sum of payments provided to a school district by the state (Sec. 9).

• Appropriates an annual total of $302.5 million for school districts beginning in the 2026-27 school year (Sec. 10).

• Specifies the method used to determine the annual amount paid to each district (Sec. 10).

• Authorizes married persons who filed a Wisconsin individual income tax return between December 31, 2023 and January 1, 2025 to receive a $600 surplus refund payment (Sec. 9137).

• Authorizes non-married persons who filed a Wisconsin individual income tax return for taxable year 2024 to receive a $300 surplus refund payment (Sec. 9137).

• Prohibits the surplus refund payments from exceeding a taxpayer’s net income tax liability for taxable year 2024 (Sec. 9137).

• Prohibits taxpayers who were dependents of another taxpayer in 2024 from receiving surplus refund payments, aside from dependent spouses who shall receive $300 instead of the $600 granted to married persons (Sec. 9137).

• Prohibits deceased taxpayers from receiving surplus refund payments (Sec. 9137).

• Specifies that recently deceased married persons who jointly filed taxes with their spouse in 2024 will have their surplus refund payments directed to their surviving spouse (Sec. 9137).

• Exempts part-year residents and non-residents from surplus refund payments unless at least 90% of their total income for 2024 is taxable by the state of Wisconsin (Sec. 9137).

• Requires the Department of Revenue to identify eligible taxpayers and the amount due to each, certify the amount, and issue payments by September 15, (2026).

• Requires the Department of Revenue to establish procedures for taxpayers who do not receive their due payment or receive less than the amount to which they are entitled (Sec. 9137).

• Requires claims for due payment to be made by December 15, 2026 (Sec. 9137).

• Increases funding for special education and school age parent programs by $85 million for fiscal year 2025-26 and $230 million for fiscal year 2026-27 (Sec. 9234).

• Increases funding for per pupil in state aid by $302.5 million for fiscal year 2026-27 (Sec. 9234).

• Requires the definition of “income” as applied to the Homestead Credit to match the amended definition in Section 8 of this Act (Sec. 9337).

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that increases education funding and repeals income taxes for qualified tips and overtime in Wisconsin.

Highlights:

• Establishes a surplus refund payment fund (Sec. 1).

• Appropriates $50 million for the surplus refund payment in 2027 and annually thereafter (Sec. 2).

• Extends federal section 224 Internal Revenue Code deductions to Wisconsin state tax payers for taxable years beginning after December 31, 2025 (Sec. 3).

• Limits the section 224 deductions for part-year residents and nonresidents of Wisconsin to a fraction of their qualified tips that are taxable by the state divided by their total qualified tips (Sec. 3).

• Authorizes the continuation of section 224 deductions in Wisconsin past December 31, 2028 if the Internal Revenue Code does not continue it on the federal level (Sec. 3).

• Extends federal section 225 Internal Revenue Code deductions to Wisconsin state tax payers for taxable years beginning after December 31, 2025 (Sec. 4).

• Limits the section 225 deductions for part-year residents and nonresidents of Wisconsin to a fraction of their qualified overtime pay that is taxable by the state divided by their total qualified overtime pay (Sec. 4).

• Authorizes the continuation of section 225 deductions in Wisconsin past December 31, 2028 if the Internal Revenue Code does not continue it on the federal level (Sec. 4).

• Specifies that 40% percent of a school district's summer enrollment is factored into the official number of pupils enrolled (Sec. 6).

• Amends the definition of “income” to include any amount subtracted under the qualified tips and overtime pay deductions from the previous sections (Sec. 8).

• Defines “state aid” as the sum of payments provided to a school district by the state (Sec. 9).

• Appropriates an annual total of $302.5 million for school districts beginning in the 2026-27 school year (Sec. 10).

• Specifies the method used to determine the annual amount paid to each district (Sec. 10).

• Authorizes married persons who filed a Wisconsin individual income tax return between December 31, 2023 and January 1, 2025 to receive a $600 surplus refund payment (Sec. 9137).

• Authorizes non-married persons who filed a Wisconsin individual income tax return for taxable year 2024 to receive a $300 surplus refund payment (Sec. 9137).

• Prohibits the surplus refund payments from exceeding a taxpayer’s net income tax liability for taxable year 2024 (Sec. 9137).

• Prohibits taxpayers who were dependents of another taxpayer in 2024 from receiving surplus refund payments, aside from dependent spouses who shall receive $300 instead of the $600 granted to married persons (Sec. 9137).

• Prohibits deceased taxpayers from receiving surplus refund payments (Sec. 9137).

• Specifies that recently deceased married persons who jointly filed taxes with their spouse in 2024 will have their surplus refund payments directed to their surviving spouse (Sec. 9137).

• Exempts part-year residents and non-residents from surplus refund payments unless at least 90% of their total income for 2024 is taxable by the state of Wisconsin (Sec. 9137).

• Requires the Department of Revenue to identify eligible taxpayers and the amount due to each, certify the amount, and issue payments by September 15, (2026).

• Requires the Department of Revenue to establish procedures for taxpayers who do not receive their due payment or receive less than the amount to which they are entitled (Sec. 9137).

• Requires claims for due payment to be made by December 15, 2026 (Sec. 9137).

• Increases funding for special education and school age parent programs by $85 million for fiscal year 2025-26 and $230 million for fiscal year 2026-27 (Sec. 9234).

• Increases funding for per pupil in state aid by $302.5 million for fiscal year 2026-27 (Sec. 9234).

• Requires the definition of “income” as applied to the Homestead Credit to match the amended definition in Section 8 of this Act (Sec. 9337).

Full Bill Text