14 September 2026 Wisconsin Department of Revenue publishes information about conformity with the OBBBA's compensation and benefits provisions The Wisconsin Department of Revenue released guidance to explain whether and how provisions of the federal One Big Beautiful Bill Act (OBBBA) apply for Wisconsin personal income tax purposes. (Wisconsin Tax Bulletin 234, July 2026.) Except as otherwise provided, Wisconsin conforms to the federal Internal Revenue Code (IRC) as amended through December 31, 2022. As a result, most federal tax law changes enacted under Public Law 119-21, the One Big Beautiful Bill Act, are not recognized for Wisconsin personal income tax purposes. Additionally, provisions of the IRC that were temporarily suspended or limited through 2025 under the Tax Cuts and Jobs Act of 2017, are reinstated for Wisconsin personal income tax purposes beginning in 2026. (Wisconsin IRC definitions: Wisconsin Statute Sections 71.01(6)(n), 71.22(4)(n) and (4m), 71.26(2)(b)15., 71.34(1g), and 71.42(2)(n).) The chart below summarizes the compensation and benefits provisions of the OBBBA and whether the current Wisconsin tax code conforms to those provisions. (See Tax Alert 2025-1476 for more information on the compensation and benefits provisions of the OBBBA.) Wisconsin personal income tax conformity with the OBBBA — compensation and benefits Internal Revenue Code Section | Description | Effective date | Does Wisconsin conform with federal law? | 132(f)(8) | Bicycle commuting benefits. Makes permanent the exclusion from gross income for bicycle commuting benefits. | January 1, 2026 | No. Bicycle commuting benefits up to $20 per month are excluded from taxable income (conforming to the IRC as it existed prior to the elimination of the exclusion under the 2017 Tax Cuts and Jobs Act). | 132(f) | Transportation fringe benefits. Allows a monthly exclusion from gross income for parking benefits of $340 per month and $340 per month for both commuter highway vehicle benefits and transit passes. The monthly limit is indexed each year for inflation. | January 1, 2026 | Yes. Withholding Tax Update, 2025-1, p. 13 | 217(k), 132(g)(2) | Moving expenses. Makes permanent the elimination of the deduction for moving expenses except for members of the Armed Forces and certain members of the intelligence community. | January 1, 2026 | No. Moving expense reimbursements are excluded from taxable income according to the provisions that applied prior to the elimination of the deduction under the 2017 Tax Cuts and Jobs Act. | 224 | No tax on tips. Creates deduction from gross taxable income for qualified tips up to $25,000. | January 1, 2025 (sunset 2028) | No. Income and Franchise Tax Updates, Nov. 2025. | 225 | No tax on overtime. Creates deduction from gross taxable income for qualified overtime pay. | January 1, 2025 (sunset 2028) | No. Income and Franchise Tax Updates, Nov. 2025. | 128, 139J | Employer contribution to Trump Accounts. Excludes from gross income amounts paid by employers as a contribution to the Trump account of the employee or dependents up to $2,500 per year. | January 1, 2026 | No. The state does not recognize Trump accounts. | 129(a)(2)(A) | Dependent care assistance. Increases the maximum exclusion from taxable wages for dependent care assistance from $5,000 to $7,500. | January 1, 2026 | No. The exclusion from taxable wages remains limited to a maximum of $5,000 ($2,500 if married filing separately). | 127(c)(1)(B) | Educational assistance. Makes permanent that employer payment of a student loan is included in qualified educational assistance and subjects the maximum exclusion of $5,250 to annual inflation adjustments. | January 1, 2026, for student loans; January 1, 2027, for inflation adjustments to maximum exclusion | No. Employer payment of the principal and interest for an employee's qualified education loan is not excluded from taxable income. Also, Wisconsin tax law does not adopt the annual inflation adjustment to the maximum educational assistance exclusion starting in 2027. |
Information reporting threshold Wisconsin tax code does not adopt the increase in the information reporting threshold for certain payments ($2,000 for 2026) under IRC Sections 6041(a) and 6041A(a). For 2026, information reporting is required if Wisconsin income tax was withheld or if non-wage payments for services in the state exceed $600. Ernst & Young LLP insights Employers should note the differences between the federal and Wisconsin tax codes and monitor developments closely in the future. Employers should also be aware that other states may conform differently to the federal IRC, making this an essential state research activity in 2026 and future years. | * * * * * * * * * * | | Contact Information | For additional information concerning this Alert, please contact: Workforce Tax Services - Employment Tax Advisory Services | | Published by NTD’s Tax Technical Knowledge Services group; Lori E.Ruppert, legal editor |
Document ID: 2026-1953 |
