Wisconsin Might Allow Pass-Throughs to Elect Entity Level Tax

Wisconsin would allow pass-through entities to elect to be taxed at the entity level under a bill passed by the legislature. If the bill becomes law, electing pass-through entities would pay tax at the rate of 7.9% on net income taxable in Wisconsin.

Entity Level Tax for S Corporations and Partnerships

Both S corporations and partnerships subject to tax in Wisconsin would be able to elect to be taxes as entities.

S corporations could make the election for tax years beginning as of January 1, 2018. Other pass-through entities could make the election for years beginning as of January 1, 2019.

S Corp Shareholders and Partners

If the Wisconsin governor signs the bill, an individual shareholder or partner’s federal adjusted gross income (AGI) would be adjusted for any items of income, loss, or deduction passed through from an electing entity.

S.B. 883, as passed by the Wisconsin legislature on December 5, 2018

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