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Bill > AB594

WI AB594

WI AB594
An income tax subtraction for payments on education loans. (FE)

summary

Introduced
10/24/2025
In Committee
10/24/2025
Crossed Over
Passed
Dead

Introduced Session

2025-2026 Regular Session

Bill Summary

This bill creates an individual income tax subtraction, or deduction, for principal or interest paid on qualified education loans, to the extent that the claimant has not withdrawn the payment from a college savings account or has not already deducted the interest payment from the claimant[s gross income. The bill limits the amount of the deduction to $5,130 for the 2026 tax year, and the Department of Revenue must annually adjust the limit based on the rate of inflation. Under current federal and state law, a claimant may deduct up to $2,500 of qualified education loan interest paid per year, and the maximum deduction amount is phased down to zero as the claimant[s income rises to the annual income limit that is set under federal law. Because this bill relates to an exemption from state or local taxes, it may be referred to the Joint Survey Committee on Tax Exemptions for a report to be printed as an appendix to the bill. For further information see the state fiscal estimate, which will be printed as an appendix to this bill.

AI Summary

This bill creates a new individual income tax subtraction for principal or interest payments on qualified education loans in Wisconsin, starting in the 2026 tax year. The maximum deduction amount is set at $5,130 for 2026, with an annual adjustment for inflation based on the U.S. consumer price index. The bill includes important restrictions: taxpayers cannot claim the subtraction for amounts withdrawn from college savings accounts or for loan interest payments already deducted from federal adjusted gross income. The Department of Revenue is required to annually adjust the dollar amount and incorporate these changes into income tax forms and instructions. Any adjusted amount will be rounded to the nearest $10, ensuring precision in tax calculations. This legislation aims to provide additional financial relief for individuals paying off education loans by offering a state tax benefit that complements existing federal education loan interest deduction rules, potentially helping to ease the financial burden of student loan repayment for Wisconsin taxpayers.

Committee Categories

Budget and Finance

Sponsors (26)

Last Action

Fiscal estimate received (on 11/12/2025)
(1 Companion Bills)

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