Assembly Bill 685 introduces a new provision allowing taxpayers in Wisconsin to subtract certain theft losses from their individual income tax calculations, effective for taxable years beginning after December 31, 2023. This subtraction applies to theft losses that are deductible under federal law, specifically those related to profit-seeking activities or federally declared disasters. Notably, taxpayers can claim this subtraction regardless of whether they claim the federal deduction. The bill also stipulates that taxpayers who utilize this subtraction cannot include the theft loss when calculating the itemized deductions tax credit, which is based on federal itemized deductions.

Additionally, the bill amends existing law by updating the language regarding casualty and theft deductions to align with the Internal Revenue Code. The amendment clarifies that no addition may be made for any amount for which a subtraction is claimed under the new theft loss provision. This legislative change aims to provide tax relief to individuals who experience theft losses, thereby enhancing the state's tax framework in response to such financial setbacks.

Statutes affected:
Bill Text: 71.07(5)(a)3, 71.07