Q; Does laughing in prayer breaks wudhu?
A; All-Praise is due to Allah,
Laughter is known as one of the things that nullifies ones Prayer, as it was narrated by Jaabir Ibn Abdillah (may Allah be pleased with him) who said:
If one laughs in their Prayer then they should repeat their Prayer and not their Wudu.
Related by Ad-Daraqotni: (51), and was authenticated by Ibn Hajr in Fath Al-Baari: (1/336).
Thus this opinion is known among the majority of Scholars, Ibn Al-Mundhir said:
The consensus have stated that laughter in Prayer nullifies it.
Ibn Qudaamah said:
We do not know of any differences according to this matter.
As for the opinion of laughter nullifying Wudu this is the opinion of Abu Hanifa (may Allah be pleased with him). Hence his evidences came through Ahadith that were narrated on this matter. But according to the Scholars of Hadith all that was narrated on this have been graded as Da'eef (weak). Such statements were made from Imam Ahmad, An-Nawawi, Abi Ya'la, Al-Buyhaqi, and many more.
In conclusion the more revised Scholary opinion out of the two is that laughter nullifies ones Prayer and not Wudu as it has been narrated in the Sahih Hadith on the authority of Jaabir and the consensus of Scholars. Baring in mind with this issue that what it is meant by laughing is laughing out loud and not smiling, for very smiling in Prayer does not nullify ones Prayer.
And Allah knows best...