February 21, 2023
Wisconsin Governor's proposed budget includes tax provisions
On February 12, 2023, Wisconsin Governor Tony Evers announced details of his next biennial budget. With Wisconsin enjoying a budget surplus of over $7 billion, he proposed cutting taxes by more than $1.2 billion over the biennium.
The Governor's proposal would repeal the personal property tax on businesses and reduce taxes for the middle class. Individuals making less than $100,000 and married couples or joint filers making at or below $150,000 would receive a 10% tax cut.
His budget proposal also would:
- Increase the research credit for businesses from 15% to 50% in 2024
- Limit the 30% long-term capital gains exclusion to individuals making less than $400,000
- Limit the manufacturing portion of the manufacturing and agricultural tax credit to the first $300,000 in qualified production income and leave the agricultural portion of the credit unchanged
- Increase the percentage of the federal Earned Income Tax Credit that filers with dependent children can claim, with the average relief for almost 200,000 families amounting to over $300 annually
- Enhance the Homestead Tax Credit for eligible homeowners to $35,000
- Expand property tax relief for veterans with disabilities
- Create a caregiver tax credit to help with caregiving costs that would be limited to $500 in a tax year
- Expand the Child and Dependent Care Tax Credit from 50% to 100% of the federal credit in 2023
- Adopt federal tax changes to protect student loan borrowers and adopt the remaining provisions of the Tax Cuts and Jobs Act of 2017
Legislation has not yet been introduced on these provisions.
The Governor's proposal will be scrutinized by a Republican-controlled legislature. Some legislators have advocated for a flat income tax plan, which the Governor would likely veto.
EY will continue to monitor developments in this area.
For additional information concerning this Alert, please contact:
Published by NTD’s Tax Technical Knowledge Services group; Jennifer A Brittenham, legal editor