Wisconsin Governor Tony Evers has expanded the child and dependent care tax credit, doubling the state’s contribution and increasing eligible expenses, aiming to make quality childcare more affordable. The new legislation offers potential savings of up to $4,000 annually for families with two or more children.
Wisconsin Expands Child and Dependent Care Tax Credit to Alleviate Financial Burden on Families
Wisconsin Governor Tony Evers has taken a significant step towards alleviating the financial burden of childcare costs on families in the state. By expanding the child and dependent care tax credit, Evers aims to provide direct support to childcare providers and make quality childcare more affordable across Wisconsin.
( Credit to: Newsweek )
Under the new legislation, the state will now match 100 percent of the federal tax credit, effectively doubling its contribution. Additionally, the maximum eligible expenses have been increased, offering potential savings of up to $4,000 annually for families with two or more children.
( Credit to: Newsweek )
The restructuring of the tax credit provides relief of up to $2,000 for one child and $4,000 for families with two or more children, for those with incomes at or above $43,000. However, it is important to note that the actual benefit to each family is limited by their total state income tax liability.
The new bill, known as AB-1023, also raises the cap on eligible expenses to $10,000 for one child and $20,000 for two or more children. While the tax credit can reduce tax bills to zero, it does not result in a refund for any remaining credit balance, as it is nonrefundable.
Governor Evers emphasized the significance of this legislation in supporting childcare in Wisconsin, stating that it will help defray yearly family expenses on childcare and provide some breathing room in household budgets. However, he acknowledged that this measure alone does not fully address the broader affordability and accessibility challenges facing the state’s childcare system.
Childcare advocacy leader Corrine Hendrickson echoed this sentiment, cautioning that the tax credit, which is only realized upon filing income taxes, does little to alleviate immediate financial pressures on families struggling with high childcare costs.
While the new tax credit represents progress for working families in Wisconsin, Governor Evers stressed the need for urgent and long-term investments to further reduce out-of-pocket childcare costs and ensure the sustainability of childcare providers.
In conclusion, Wisconsin’s expanded child and dependent care tax credit is a step in the right direction towards making quality childcare more affordable for families in the state. However, it is clear that a comprehensive approach is needed to address the broader challenges of affordability and accessibility in Wisconsin’s childcare system.
