Wisconsin has made the following changes to the tax laws for the 2023 tax year:
- Capital Loss Deduction: The maximum deduction for a net capital loss has increased from $500 to $3,000 for most taxpayers. If you are married and file a separate return, the maximum deduction is $1,500.
- Active Duty Military Pay Subtraction: A subtraction is available for certain pay received from the federal government during a period of active duty for members of the U.S. Armed Forces. See page 8 of the Schedule SB instructions.
- Tax Rates Reduced: The tax rates for the first and second income brackets were reduced. The new tax rates for those brackets are 3.5% and 4.4% respectively.
- Tuition and Fee Expenses: The subtraction for tuition and fees decreased to $6,974 per student. The phase-out range has increased. See page 4 of the Schedule SB instructions.
- Earned Income Credit: Wisconsin has adopted the changes made to the federal earned income credit in Public Law 117-2. This law increased the amount of investment income allowed before a taxpayer was disqualified from the credit and made other changes. For Wisconsin's earned income credit, you must still have a qualifying child to be eligible.
IRS Adjustments – If the IRS adjusted any of your federal income tax returns, you must notify the department within 180 days of any adjustment that affects your Wisconsin income tax returns. See page 9.
For more information regarding these changes, please click here.