Instructions For Completing Wisconsin Schedule

3. The application of the rules for plan distributions pursuant

to a qualified domestic relations order to a sec. 457 plan

(deferred compensation plans of state and local govern-

(a) Federal – A taxpayer may elect to roll over capital

ments and tax-exempt organizations). (Public Law 107-16,

gain from the sale or exchange of any qualified

effective for transfers, distributions, and payments after

empowerment zone asset purchased after December

December 31, 2001)

21, 2000, and held for more than one year where the

taxpayer uses the proceeds to purchase other

4. The rollover treatment of a distribution from a qualified

qualifying empowerment zone assets in the same

cash or deferred arrangement that is made upon hardship of

zone within 60 days of the sale of the original zone

the employee. (Public Law 107-16, effective for distribu-

asset. (Public Law 106-554)

tions made after December 31, 2001)

(b) Wisconsin – The election to roll over capital gain

5. The revision of rules relating to the rollover of eligible

from the sale or exchange of any qualified empower-

distributions from qualified retirement plans. (Public Law

ment zone asset does not apply for Wisconsin.

107-16, effective for distributions after December 31, 2001)

6. Provision allowing distributions from secs. 401(k) plans,

403(b) annuities, and 457 plans to occur upon severance

(a) Federal – The medical savings account program is

from employment rather than separation from service.

extended through 2002. (Public Law 106-554)

(Public Law 107-16, effective for distributions after

December 31, 2001)

(b) Wisconsin – No contributions may be made to

medical savings accounts except by or on behalf of

7. The exclusion from gross income for a direct trustee-to-

individuals who made medical savings account

trustee transfer to a governmental defined benefit plan from

contributions prior to 2001 and employees who are

a sec. 403(b) annuity or a sec. 457 plan. (Public Law 107-16,

employed by a participating employer.

effective for transfers after December 31, 2001)

8. Provision allowing a plan, for purposes of the cash-out rule,

DIFFERENCES IN WISCONSIN – FEDERAL LAW

to provide that the present value of a participant’s nonfor-

WHICH AFFECT ONLY FISCAL FILERS

feitable accrued benefit is determined without regard to the

portion of such benefit that is attributable to rollover contri-

The following provisions of the Internal Revenue Code also do

butions. (Public Law 107-16, effective for distributions

not apply for Wisconsin for 2001. These provisions only affect

after December 31, 2001)

returns filed on a fiscal-year basis. If you need additional

information regarding any of these items, contact any Depart-

9. Provision allowing a renewal community business to be

ment of Revenue office.

treated as an enterprise zone business for purposes of

sec. 1397A of the Internal Revenue Code (IRC). This

1. The removal of the 60-month limitation on the deduction for

section allows an increase in expensing under sec. 179 of the

student loan interest and the increase in the modified

IRC. (Public Law 106-554, effective for property acquired

adjusted gross income limitation. (Public Law 107-16,

after December 31, 2001)

effective for taxable years ending after December 31, 2001)

10. The easing of the inclusion-in-income rules for participants

2. The adjustment to the limitation on benefits from a defined

in sec. 457 plans. (Public Law 107-16, effective for distri-

benefit plan. (Public Law 107-16, effective for years ending

butions after December 31, 2001)

after December 31, 2001)

No differences existed at the time of this printing.

Instructions For Completing Wisconsin Schedule - 2001 Page 4

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