Gov. Tony Evers signs expanded child tax credit, urges more action on affordable child care

MADISON – Gov. Tony Evers on Monday signed into law an expansion of the tax credit available to filers with children and dependents, while calling on lawmakers to take more steps to make child care affordable and accessible.

More than 110,000 taxpayers will see an average benefit of over $656 per filer, according to an estimate from the governor's office.

"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 a statement. "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."

Current law allows taxpayers eligible for the federal child and dependant tax credit to claim a state credit equal to 50% of their federal credit. This law increases that to 100%. It also increases the amount of employment-related expenses a person with dependents can claim.

Under current law, a filer can claim a maximum credit of between $300 and $525 for one qualifying dependent and between $600 and $1,050 for two or more qualifying dependents, depending on their income and amount of qualifying expenses. Under the bill, the maximum credit available to taxpayers will now be between $2,000 and $3,500 for one qualifying dependent and between $4,000 and $7,000 for two or more qualifying dependents

The measure, which received bipartisan support in the Legislature, is the only one from a $2.1 billion Republican tax package to receive the governor's approval. On Friday, Evers vetoed bills that would have significantly expanded the state's second-lowest tax bracket to include more than 1 million Wisconsin residents earning between $19,000 and $150,000 per year, exempted up to $75,000 of retirees' income, and expanded tax credits for married filers.

While Evers lauded the bipartisan passage of the credit expansion, he urged lawmakers to make additional efforts to assist families and child care providers.

"Republican legislators remain on the clock to make the meaningful investments necessary to prevent the collapse of our child care industry, which is essential to maintain our current levels of workforce participation. 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."

Republican lawmakers have rejected Evers' efforts to extend funding for Child Care Counts, a federally funded pandemic-era program that has helped keep child care centers open in an unstable economy. The program was set to run out of funds by January 2024 without additional funding, something Democrats and program advocates warned could trigger large tuition increases for parents, worsen staff shortages and shutter child care programs.

Evers announced plans in October to funnel $170 million in "emergency funding" to keep Child Care Counts operating at current levels through June 2025.

“When we think about tax credits in general, I think we can all agree that our working families are a must. We must look at what is happening in their lives. And for many of them as they look at their child care and their dependent care, it's an astronomical amount of money that they have to spend on it,” said bill co-author Rep. Amy Binsfeld, R-Sheboygan, ahead of its Assembly passage.

Bill co-author Sen. Romaine Quinn, R-Cameron, said during testimony on the bill that his child care provider, like many others, is raising its rates in order to pay staff and stay open.

“There's a lot of ways we can address this, but this is one of them. We are directly putting money in the pockets of parents who are paying a lot of money right now for child care,” Quinn said.

Jessie Opoien can be reached at jessie.opoien@jrn.com.