More than 110,000 Wisconsin taxpayers will get extra money in their pockets after the state governor signed a bill to expand child tax credits in the state.
Democratic Governor Tony Evers enshrined Assembly Bill 1023 into law on March 4, which expands the current child and dependent care tax credit from 50 percent to 100 percent of the federal credit. It means there will be tax relief for families struggling with the cost of care for children and adult dependents.
The new law also increases the amount of qualifying expenses a filer is allowed to claim, up to $10,000 for a single dependent, and up to $20,000 for two or more dependents. On average, each tax filer will receive $656, according to a statement issued by Evers on Monday.
The total will be almost $73 million in annual tax relief and it will come into force for the 2024 tax year.
"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 in the statement.
Read more: The Child Tax Credit: Who Qualifies and How to Claim It
"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."
In a statement to Newsweek, Evers said, "Wisconsin faces a looming child care crisis — costs to working families are skyrocketing, we don't have enough child care providers, and the providers we have are struggling to keep the lights on. And the effects are intuitive — if a kid no longer has child care or a parent can't afford it, someone's going to have to stay home with them. Folks, lack of accessible, affordable child care is a statewide workforce issue."
Peter Barca, secretary of the Wisconsin Department of Revenue, said the bill will help parents and boost the Badger State economy.
"It's a benefit for small businesses and the workforce," Barca said, according to a report by Spectrum News. "It's a benefit, as the governor said, for families. It's a benefit for children, and it's a benefit for daycare providers whose parents can now better afford to put their kids in daycare."
Tamara Johnson, executive director at Malaika Early Learning Center in Milwaukee, told WTMJ-TV that the move is a relief for families. "It's been an uphill battle folks have been fighting for quite some time," she said.
"For some of our families, they're literally weighing the option of childcare versus rent. Families who are working should be afforded the opportunity to get their children in high-quality care."
However, childcare advocates have said the changes won't address the childcare costs parents are paying for right now.
Corrine Hendrickson, a New Glarus child care provider and child care advocacy leader, told the Wisconsin Examiner that the tax relief "doesn't help parents afford it now, because they will not receive any of that money until next spring."
"The 'average' [savings] the parent gets back doesn't even cover two weeks for two kids," Hendrickson said. She continued, saying that for those "struggling the most, it likely won't help them at all. And it definitely doesn't increase the supply of child care, as it doesn't allow child care programs to meaningfully increase tuition without pricing families out and forcing them to choose between care and their employment."
Update 3/6/24, 11:09 a.m. ET: This article was updated with a statement from Tony Evers.
About the writer
Aliss Higham is a Newsweek reporter based in Glasgow, Scotland. Her focus is reporting on issues across the U.S., including ... Read more
