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Evers signs bill expanding child and dependent care tax credit

The new law had strong bipartisan support in the Wisconsin Legislature.

Evers signs bill expanding child and dependent care tax credit

Source: Wis. Gov. Tony Evers

March 4, 2024 11:27 AM CDT
By: Jimmie Kaska

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WAUKESHA, Wis. (Civic Media) – Wisconsin Gov. Tony Evers signed a bill Monday that will expand child and dependent care tax credits.

Assembly Bill 1023, which had had strong bipartisan support, passed 29-3 in the Senate and 92-4 in the Assembly.

The bill will expand the child and dependent care tax credit for Wisconsin from 50% of the federal credit to 100%.

Evers said in a release that the estimated savings will be $656 per filer, or about $73 million in annual tax relief.

“The cost of child care is too darn high—making quality child care more affordable across Wisconsin is not just about doing what’s best for our kids, it’s also critical for keeping more folks and parents in our state’s workforce,” Evers said. “Signing this bill today will go a long way toward defraying yearly family expenses on child care, giving Wisconsinites some breathing room in their household budgets and making sure our kids have the early support and care they need.”

The credit adjustment will begin in 2024.

The bill also increases the top number for qualifying expenses from $3,000 to $10,000 for one dependent and from $6,000 to $20,000 for two or more dependents.

Current state law allows for a maximum credit of $300 to $525 for one dependent in tax filings, or $600 to $1,050 for two or more dependents. With the new law, the credit increases to $2,000 to $3,500 for one dependent and $4,000 to $7,000 for two or more.

Evers said the new law is a step in the right direction, but legislators need to do more to help with child care costs in Wisconsin.

“Wisconsin needs urgent, long-term investments to further reduce out-of-pocket child care costs for working families while making sure child care providers can keep their doors open and lights on,” Evers said. “We need a long-term solution to our state’s looming child care crisis—including direct support for providers through Child Care Counts—and I will work with anyone from either side of the aisle who’s ready to work together to get this done.”

The bill was one of four bills packaged by legislative Republicans for tax relief. Evers vetoed the other three bills on Friday afternoon.

Wisconsin Act 101 can be read below.