SB 42

This bill modifies the income tax subtraction for amounts paid for medical care

insurance by self-employed individuals. Under current law, the subtraction may not

exceed the individual's net earnings from a trade or business that are taxable by

Wisconsin. Under the bill, the subtraction may not exceed the individual's wages,

salary, tips, unearned income, and net earnings from a trade or business that are

taxable by Wisconsin.

The bill similarly modifies the provision under current law that prorates the

subtraction for self-employed nonresidents and part-year residents based on the

percentage of the individual's net earnings from a trade or business taxable by

Wisconsin to total net earnings from a trade or business. Under the bill, the

subtraction is prorated based on the percentage of the individual's wages, salary,

tips, unearned income, and net earnings from a trade or business that are taxable

by Wisconsin to total wages, salary, tips, unearned income, and net earnings from a

trade or business.

Because this bill relates to an exemption from state or local taxes, it may be

referred to the Joint Survey Committee on Tax Exemptions for a report to be printed

as an appendix to the bill.