State of Wisconsin (WI) Employment Laws
This state employment law section provides a range of state employment laws and posters. For your convenience, the poster section features both downloadable state and federal posters. Employment laws will typically vary from state to state. For further information or for individual issues your company may be experiencing, it is always prudent to contact your state labor department or an employment law attorney knowledgeable in your state employment laws.
Please view the left-hand navigation for the various state laws covered in this section.
November 7, 2011: Wisconsin Adopts Federal Law Regarding Income Tax Exclusion for Employer-Provided Health Insurance Benefits for Adult Children
Governor Walker has signed legislation that simplifies Wisconsin's income tax treatment of employer-provided health insurance benefits for adult children. As a result of the legislation, employers in Wisconsin no longer need to add the fair market value for the health insurance benefit to an employee's income, and parents will not need to report the additional income on their state income tax return. To receive this income tax benefit, the child must be younger than age 27 on December 31st. This change is retroactive to January 1, 2011.
Income Tax Exclusion for Dependent Coverage to Age 26
The Affordable Care Act generally requires plans and issuers that offer dependent coverage to make the coverage available until a child reaches the age of 26. In addition, the law extended the federal income tax exclusion of employer-provided health benefits to employees' covered children who do not turn 27 by the end of the tax year, so employers are not required to add the fair market value for the health insurance benefit to the employee's income, and parents do not have to report the additional income on their federal income tax return.
Previously, employers were required to add the fair market value of the health insurance benefit to the parent's income if a non-dependent adult child was added to the plan. The parent then paid state and federal taxes on the health insurance benefit.
What the Change Means for Employers and Employees
Below are the specific actions employers and employees should take related to this law change, according to the Wisconsin Department of Revenue:
- Employers.Stop adding the fair market value of the health insurance benefit to your employee's income. When you prepare the W-2 statements for 2011, do not include any income previously added for the health insurance benefit. Your employee will get credit on their income tax return for taxes withheld on the health insurance benefit.
- Employees. You will receive credit on your state income tax return for the taxes withheld in 2011 for the additional income added for the health insurance benefit. The health insurance benefit is no longer considered to be taxable income.
For more information, please click here.
January 1, 2011: Tax Exemption for Contributions to Health Savings Accounts
On January 24, Governor Walker signed into law 2011 Wisconsin Act 1 to adopt, for state income and franchise tax purposes, a number of provisions of the federal Internal Revenue Code that relate to claiming a deduction for an amount a person pays into a health savings account (HSA). Effective for taxable years beginning on January 1, 2011, the act creates a tax exemption for contributions to health savings accounts.
Under current federal law, individuals are allowed a deduction from federal gross income for amounts contributed during the taxable year to HSAs. Earnings on the accounts are also tax-deductible, and account funds may be withdrawn tax-free when used to pay for routine and preventive medical care. Prior to enactment of 2011 Wisconsin Act 1, the state had not adopted the federal treatment of HSAs and contributions to health savings accounts were subject to state tax.
The new law does not affect 2010 Wisconsin tax returns (due April 18, 2011) or 2010 Forms W-2. For further information on the 2010 Wisconsin tax treatment of HSAs, please click here.
Wisconsin (WI) Links & Resources
- Official State Website
- Department of Labor & Industry
- Department of Insurance
- Find a State Agency
- Department of Health Services
- Medicaid Information
- State HR News
- State Labor Market Information
- Tax Information & Forms
- Wisconsin Business Resources
- Wisconsin Employment Application Law
- Workers’ Compensation