MADISON, Wis. — On May 13, 2026, the Wisconsin State Assembly passed Assembly Bill 1, as amended, during a special session. The bipartisan measure returns $1.8 billion in surplus funds to taxpayers through direct rebates, property tax relief, and targeted tax cuts for workers, while also investing in kids.

The agreement follows months of negotiations with the governor and reflects a commitment to responsible budgeting while delivering meaningful relief to Wisconsin families facing rising costs.

“This is a straightforward, bipartisan agreement that sends surplus money back to Wisconsin taxpayers through direct payments, property tax relief, and tax cuts,” said Rep. Travis Tranel. “It eliminates state taxes on tips and overtime so workers can keep more of what they earn. We also increased special education funding to a record level while helping ease pressure on property taxes caused by the governor’s 400-year veto. This compromise keeps the focus on taxpayers, kids, and responsible budgeting.”

AB 1, as amended, includes the following:

  • $1.8 billion in tax relief returned to taxpayers through rebates, property tax relief, and income tax reductions.
  • Direct rebate payments of up to $600 for married couples and $300 for individuals who are full-time Wisconsin residents.
  • Increased special education funding, raising reimbursement rates to 50% by the 2026–27 school year to better support students, families, and school districts ($315 million).
  • Permanent elimination of state income taxes on tips and overtime pay, allowing workers to keep more of what they earn ($230 million in savings).
  • $350 million in property tax relief.
  • Expansion of the Veterans and Surviving Spouses Property Tax Credit.
  • $21 million in Disaster Assistance Grants.

This tax cut builds on the $1.5 billion in tax relief secured in the most recent 2025–27 bipartisan budget, which included the second-largest income tax cut in state history. Wisconsin’s rainy-day fund remains strong at approximately $2 billion, and the latest nonpartisan Fiscal Bureau projections show an additional $350 million in revenue, underscoring the state’s stable fiscal outlook and supporting a responsible return of surplus dollars to taxpayers.

While no compromise is perfect, this agreement represents a good-faith effort to address affordability, support kids, and return surplus funds to the people of Wisconsin so the state’s economy can remain strong and growing.

Assembly Bill 1, as amended, passed the State Assembly 61–32 on a bipartisan vote.