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 their itemized deductions tax credit.

Additionally, the bill amends existing law to clarify the treatment of casualty and theft deductions under the Internal Revenue Code. The amendment specifies 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, ensuring they are not penalized in their tax calculations while also aligning state law with federal guidelines.

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