WI AB594

Creates a new Wisconsin individual income tax deduction for principal and interest paid on qualified education loans, effective for tax years beginning after December 31, 2025

Sets the maximum deduction at $5,130 for the 2026 tax year, with annual inflation adjustments based on the U.S. Consumer Price Index beginning in 2027

Prohibits claiming the deduction for amounts withdrawn from a college savings account (529 plan) or for interest already deducted under the existing federal deduction (IRC Section 221)

Expands beyond current law, which only allows deduction of up to $2,500 in qualified education loan interest (not principal) and phases out at higher income levels