summary
Introduced
10/30/2025
10/30/2025
In Committee
10/30/2025
10/30/2025
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or deduction, for principal or interest paid on qualified education loans, to the extent that the claimant has not withdrawn the payment from a college savings account or has not already deducted the interest payment from the claimant[s gross income.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 state income tax subtraction for education loan payments, allowing taxpayers to deduct up to $5,130 in principal or interest paid on qualified education loans for taxable years beginning after December 31, 2025. The deduction has two key restrictions: first, taxpayers cannot claim the subtraction for amounts withdrawn from a college savings account, and second, they cannot claim the subtraction for loan interest that has already been deducted from their federal adjusted gross income. The bill requires the Department of Revenue to annually adjust the $5,130 limit based on the U.S. consumer price index for urban consumers, with any adjusted amount rounded to the nearest $10. This means the maximum deductible amount will likely increase each year to account for inflation, providing taxpayers with a potentially growing tax benefit for education loan payments. The provision aims to provide financial relief to individuals paying off education loans by offering a state-level tax incentive that complements existing federal education loan interest deduction rules.
Committee Categories
Budget and Finance
Sponsors (26)
Kristin Dassler-Alfheim (D)*,
Dianne Hesselbein (D)*,
Sarah Keyeski (D)*,
Chris Larson (D)*,
Brad Pfaff (D)*,
Melissa Ratcliff (D)*,
Kelda Roys (D)*,
Jeff Smith (D)*,
Mark Spreitzer (D)*,
Deb Andraca (D),
Margaret Arney (D),
Jill Billings (D),
Ben DeSmidt (D),
Joan Fitzgerald (D),
Tara Johnson (D),
Vincent Miresse (D),
Sylvia Ortiz-Velez (D),
Lori Palmeri (D),
Amaad Rivera-Wagner (D),
Ann Roe (D),
Christine Sinicki (D),
Angela Stroud (D),
Shelia Stubbs (D),
Lisa Subeck (D),
Angelito Tenorio (D),
Randy Udell (D),
Last Action
Fiscal estimate received (on 11/12/2025)
Official Document
bill text
bill summary
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bill summary
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bill summary
| Document Type | Source Location |
|---|---|
| State Bill Page | https://docs.legis.wisconsin.gov/2025/proposals/reg/sen/bill/sb601 |
| Fiscal Note - SB601: Fiscal Estimate From DOR | https://docs.legis.wisconsin.gov/2025/related/fe/sb601/sb601_dor.pdf |
| BillText | https://docs.legis.wisconsin.gov/document/proposaltext/2025/REG/SB601.pdf |
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