Wisconsin provides a subtraction from federal adjusted gross income for contributions into a Wisconsin college savings account. The Wisconsin subtraction from income is for contributions to an Edvest or Tomorrow's Scholar college savings account and is equal to the lesser of the amount contributed to the account for 2014 or $3,050 ($1,520 if married filing separate or a divorced parent). For 2015, the maximum subtraction will be $3,100 ($1,550 if married filing separate or a divorced parent).

Beginning in 2014 and thereafter, the contribution deadline for a specific year is extended to April 15 of the following year. For example, 2014 contributions must be made during 2014 or by April 15, 2015. Also beginning in 2014 and thereafter, the excess of the amount contributed to the college savings account over the amount allowed as a subtraction may be carried forward to future years and claimed as a subtraction subject to the yearly limitations.

Schedule CS, College Savings Accounts, must be filed by each contributor to an Edvest or Tomorrow's Scholar college savings account to claim the subtraction from income. Additional information is on the department's website in an article titled Changes to Tax Treatment of College Savings Accounts for 2014.

Tax Treatment for 2014

The department instructed tax practitioners and taxpayers in the fall of 2014 that rollovers into a Wisconsin college savings account were not eligible for the Wisconsin subtraction from income. However, many taxpayers had already made rollovers in 2014 based on prior guidance issued by the department providing that rollovers were eligible for the subtraction from income. Because of the reliance on prior guidance issued by the department by some taxpayers, the department will allow all taxpayers who make a rollover into a Wisconsin college savings account by April 15, 2015, a subtraction from income on 2014 tax returns.

Taxpayers may amend their 2014 tax returns to claim the subtraction from income if they have already filed their returns and did not report the amount from a rollover on line 2 of Schedule CS.

Tax Treatment for 2015 and Thereafter

Rollovers into a Wisconsin college savings account for the 2015 taxable year are not eligible for the subtraction from income. Rollovers made for the 2014 taxable year on or before April 15, 2015 that were in excess of the amount allowed as a subtraction in 2014 may be carried forward to future years and claimed as a subtraction subject to the yearly limitations.

April 6, 2015