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April 26, 2006
Wisconsin Senate approves Health Care Savings Account bill
The WI state Senate has approved legislation that would give all Wisconsin residents a break on state income taxes for contributions to health savings accounts.
The bill would give a state income tax credit for six and a half percent of the amount a taxpayer claims as a federal tax deduction for contributions to a health savings account.
The 18-to-14 vote came despite Democrats' objections that the breaks will go to the rich and do nothing for the growing number of residents without health insurance.
Republicans say the tax breaks will encourage residents to open health savings accounts. They say the bill would provide small business owners, in particular, with another tool to deal with the rising costs of health insurance.
The Senate's vote sends the measure to Governor Doyle, a Democrat who vetoed a similar plan in 2004. He said at the time that the plan would not help low-income workers.
Taxpayers are already allowed to deduct their contributions to the accounts from their federal taxes. Earnings on the accounts are also tax-deductible and funds may be used tax-free to pay for HSA qualified expenses.
This is great news for Wisconsin residents interested in opening a Health Savings Account. Hopefully Governor Doyle will see the benefits of Health Savings Accounts and not veto the bill this time around.
Posted by Wiley Long at April 26, 2006 09:15 AM