AB 941

This bill creates an income and franchise tax credit for businesses that

contribute to a scholarship-granting organization or to an educational improvement

organization. The amount of the credit is equal to 75 percent of the contribution, but

the amount of the credit may not exceed $200,000 in any taxable year. The total

amount of the credit that all businesses may claim in any taxable year is $12,000,000.

Under the bill, a scholarship-granting organization is a nonprofit entity that

contributes at least 80 percent of its annual receipts to scholarship programs for

pupils in grades kindergarten to 12 at private or public schools in this state. Under

the bill, an educational improvement organization is a nonprofit entity that

contributes at least 80 percent of its annual receipts as grants to public schools for

innovative educational programs.

This bill also creates a nonrefundable individual income tax credit for amounts

spent by a claimant, for the claimant's dependent child, on eligible education

expenses at public schools, private schools, or charter schools for grades

kindergarten to 12. Because the credit is nonrefundable, no refund is paid if the

amount of the credit exceeds the taxpayer's tax liability.

Under the bill, education expenses include amounts that are spent for tuition,

books, and other educational materials or supplies that are purchased by a claimant

in the year to which the claim relates and that are related to the pupil's curricular

activities and attendance at an eligible institution.

The maximum credit that may be claimed under the bill is $2,500 per year if

the claimant files as a single individual, head of household, or married person filing

separately. The maximum credit that may be claimed under the bill is $5,000 per

year if the claimant is a married person filing a joint return. The amount of credit

that may be claimed by a nonresident or part-year resident of this state is modified

based on the ratio of the claimant's Wisconsin adjusted gross income (AGI) to his or

her federal AGI.