AB 908

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.