Wisconsin Governor Approves a Measure to Double Child Care Tax Credit – Sky Bulletin

In a significant move towards providing financial relief to families, Wisconsin Governor, Tony Evers, has endorsed a bill authored by Republican lawmakers that will substantially increase the child care tax credit in the state. This approval comes shortly after the governor vetoed three GOP-sponsored tax cut proposals, which would have collectively reduced taxes by $800 million.

Via his account on X, the social networking service previously known as Twitter, Governor Evers expressed his acknowledgment of the economic burden of child care costs, stating “the cost of child care is too darn high.”

Statistics from the U.S. Department of Labor illustrate the weight of these expenses, with Milwaukee County’s median child care cost reaching $19,096 last year. This figure is roughly 26% of the county’s median family income, which stands at $62,314. Similarly, Dane County saw a median child care cost of $19,586, making up about 17.6% of its median family income of $94,813.

The legislation Evers signed will align the state child care tax credit with the federal credit, raising the state’s claim from a previous 50% to a full 100% of the federal amount. Additionally, the maximum eligible expenses for the state credit would increase to $10,000 for families with one qualifying dependent and to $20,000 for those with two or more dependents.

The financial implications of this child care tax credit enhancement are considerable, with an estimated annual revenue reduction of around $73 million for the state, as projected by the state Department of Revenue.

This enactment was a segment of a bundle of tax relief measures set forth by Republicans in January. The bundle included not just the child care tax credit increment, but also bills proposing to expand income tax brackets, augment the marriage tax credit, and increase retiree income exemptions. Collectively, these bills were predicted to reduce state tax revenue by over $2 billion in the 2024-25 period and by about $1.4 billion thereafter annually.

Out of the package, only the child care tax credit expansion secured Evers’ approval. He rejected the other bills last Friday, citing concerns over the potential depletion of the state’s financial reserves. In a previous scenario in November, the governor vetoed a comparable tax cut package, and during the state’s July budgeting, he employed his partial veto authority to scale down a $3.5 billion tax reduction to $175 million.