Assembly Bill 870 aims to update Wisconsin's state income and franchise tax laws to align with recent amendments to the federal Internal Revenue Code (IRC) as of December 31, 2025. The bill proposes changes to several sections of the statutes, including 71.01, 71.05, 71.07, 71.22, and 71.26, and introduces new provisions that clarify which federal public laws will be excluded from the IRC definition for state tax purposes for taxable years beginning after December 31, 2025. Key amendments include the establishment of definitions for the IRC applicable to individuals, fiduciaries, and corporations, as well as rules for reporting non-wage payments, rents, and royalties.

Additionally, the bill modifies existing language regarding the reporting of employee compensation, shifting the reporting threshold from a fixed amount of $600 to a variable amount that corresponds with the dollar amount specified in section 6041(a) of the IRC for the calendar year. This change is designed to maintain consistency with federal standards. Overall, the bill seeks to streamline tax compliance for Wisconsin residents and businesses by ensuring that state tax laws are in harmony with federal regulations while addressing specific reporting requirements for various entities and compensation structures.

Statutes affected:
Bill Text: 71.01(6)(n)1, 71.01, 71.07(5)(a)(intro.), 71.07, 71.07(5)(a)2, 71.07(5)(a)3, 71.07(5)(a)4, 71.22(4)(n)1, 71.22, 71.22(4m)(n)1, 71.26(2)(b)15.a, 71.26, 71.26(3)(e)1, 71.34(1g)(n)1, 71.34