More than 15,000 Wisconsin families are one step closer to avoiding an unexpected tax increase, according state Senator Van Wanggaard (R-Racine). “Wisconsin’s the only state … that treats healthcare coverage for adult children as income for tax purposes.”
Wanggaard calls it a hidden tax that many families and businesses didn’t know about, and they would have been surprised by the extra tax burden at the end of the year. Both Wisconsin and the federal government require health insurance companies to cover most dependent children until they reach age 26. “In these changing and challenging times we should do what we can to prevent tax increases and that’s what this bill actually does.”
This bill (SB-203) exempts health care coverage for adult dependent children from a parent’s income, aligning state and federal laws. Wanggaard, the bill’s coauthor, says the reporting requirement and trying to determine the value of the benefit had the potential to be an “administrative nightmare” for Wisconsin employers.
The bill is expected to reduce state revenue by approximately $1.8 million annually, according to Department of Revenue. The bill would apply retroactively to January 1, 2011. The bill unanimously passed the Senate (33-0). It now moves to the Assembly.
Senate Bill 203 is authored by Senator Van Wanggaard (R-Racine) and Representative Pat Strachota (R-West Bend).
AUDIO: Jackie Johnson report 1:18