WI 2025 joint elderly 43Kintrec 88Kpensions 100Kgssi 75page 75 sage

[feenberg]

See http://taxsim.nber.org/out2psl/1024

TA and PE disagree on taxable income while pretty close on AGI. PE also shows a large difference between tax before credits and siitax, without explanation. TA finds no credits.

[DTrim99]

Two things are going on, sharing one root cause — our modeling of Wisconsin's Act 15 retirement income subtraction (Schedule SB line 16, $24,000/person at 67+; here 2 × $24,000 = $48,000, matching your Schedule SB).

1. The "credit" you can't see isn't a credit. We model line 16 as an alternative tax computation and report the lower of (a) tax on full income and (b) tax with the exclusion — so tax-before-credits shows (a) = 5,897 and siitax shows (b) = 3,353, with credits at 0. Hence the unexplained-looking drop.

2. But our 3,353 is still too high versus your 2,862. The bug: we subtract the $48,000 from taxable income after the standard-deduction phaseout has already been applied at the higher pre-subtraction WI income (132,545 → standard deduction only 4,475). On the form, the subtraction reduces WI income on line 7 first, and the standard deduction on line 8 is looked up on that lower income (84,545 → 13,928). With the larger standard deduction, taxable income is 68,717 and tax 2,862, matching your return — and our reported taxable income (126,170) never reflects the subtraction, which is the taxable-income discrepancy you saw.

This is a bug on our side in how the exclusion flows through the standard deduction; we'll open a fix in policyengine-us. Thanks for the completed Schedule SB — it pinpointed it.

[DTrim99]

Fix up in PolicyEngine/policyengine-us#8818 (draft): routes the Act 15 retirement subtraction through WI income before the standard-deduction phaseout, so the standard deduction is looked up on the post-subtraction income (Form 1 line 7). That brings taxable income to 68,717 and tax to 2,862, matching your return.

@PavelMakarchuk tagging you for review.

[PavelMakarchuk]

Tracked/fixed in PolicyEngine/policyengine-us#8818 (open): routes the WI Act 15 retirement subtraction through WI income before the standard-deduction phaseout, so the standard deduction is looked up on post-subtraction income (Form 1 line 7). Closing here as diagnosed + tracked; will reflect once #8818 merges.