Child Care Tax Credit
Child Care Tax Credit
The cost of child care keeps going up in Wisconsin, from roughly $1,100 in 2014 to about $1,200 in 2016, and child care is the largest expense Wisconsin’s working families see each month. Governor Walker is committed to making child care affordable for Wisconsin’s working families, which is why he is proposing the Child Care Tax Credit. With almost 69% of Wisconsin working and unemployment at or below 3% for the seventh straight month, Wisconsin cannot afford for child care to be a barrier to the workforce for Wisconsin’s families.
The Child Care Tax Credit will be available to all Wisconsin families who have qualifying child care expenses and earned income. Governor Walker’s proposal creates a nonrefundable tax credit for expenses tied to child care and dependent care.
- The Child Care Tax Credit adopts the provisions of the Federal Child Care and Dependent Care Tax Credit, but applies the relief to Wisconsin taxes.
- The maximum amount of care expenses eligible to be claimed is $3,000 for one person or $6,000 for two or more people. The tax credit is determined by multiplying the expenses not more than the cap by 20% – 35%, depending on income.
- The amount a household is eligible to receive in tax relief is tied to their household earned income. The tax credit is structured to provide the most aid to households with the least earned income. The Child Care Tax Credit is a nonrefundable tax credit.
- Households with qualifying expenses will be eligible for both the Wisconsin Child Care Tax Credit and the federal Child Care and Dependent Care Tax Credit.
Governor Walker’s Record of Helping Wisconsin’s Working Families:
- Before Governor Walker took office, Wisconsin’s property taxes had increased by 27% in the decade prior to 2011. Now property taxes are lower than they were in 2010 and the state property tax was eliminated.
- Governor Walker’s $100-per-child tax rebate helped to give back over $94.2 million to almost 558,000 of Wisconsin’s families and the recent Sales Tax Holiday helped Wisconsin’s families stretch their paycheck a little further.
- Governor Walker’s pro-jobs agenda means Wisconsin’s unemployment rate has been at or below 3% for a record seven straight months, and this year Wisconsin had more people working than ever before.
- Governor Walker has made numerous improvements to Wisconsin Shares, which provides monetary assistance for child care to Wisconsin’s low-income families. These improvements include lifting the child care rate freeze and increasing the amounts received by child care providers.
- Governor Walker also eliminated the child care benefit cliff, allowing individuals to seek better jobs and higher wages without fear of losing their child care benefits.