SB 5

This bill authorizes the creation of a pilot and a permanent program under

which periodic payments of an eligible individual's or married couple's federal and

state earned income tax credit would be made to the claimant throughout the year,

instead of a single payment when the claimant files his or her income tax return.

Under the bill, the Department of Revenue must request that the Internal

Revenue Service assist DOR in a two-year pilot program to make monthly payments

to eligible recipients for EITC amounts such claimants would otherwise be eligible

to claim on their federal income tax returns. If the IRS agrees to participate, DOR

and the IRS must enter into an agreement about the operation of the program and

the responsibilities of the parties. If the IRS does not agree, the statute does not

apply.

Under the pilot program, the IRS would determine the amount of EITC that

could likely be claimed by 100 randomly selected residents of Wisconsin for taxable

years 2019 and 2020 and would forward that amount to DOR, for each taxable year.

The test group of 100 claimants would receive one-eleventh of their likely federal

credit amount each month, up to two-thirds of the maximum likely credit amount.

Generally, any remaining EITC for which a claimant would be eligible could be

claimed on the claimant's federal or state tax return.

DOR is required to establish a second test group of 100 claimants who are likely

to be eligible to claim the EITC for taxable years 2019 and 2020, who will receive their

EITC after filing their individual income tax returns, and compare their financial

stability to that of the other test group.

For taxable years 2021 and thereafter, if DOR can reach an agreement with the

IRS on each party's responsibilities and duties and can reach an agreement on how

the program will operate, DOR must make the pilot program permanent for all

eligible EITC claimants, based on the parameters and specifications of the pilot

program.