MILWAUKEE — Governor Evers signed a bill Monday that will reduce annual childcare costs for working families.
The new law increases the child tax credit available to filers with children and dependents. According to the governor’s office, more than 110,000 taxpayers will see an average yearly benefit of $656 per filer.
“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,” Tamara Johnson said.
Johnson is the Executive Director at Malaika Early Learning Center in Milwaukee. With 28 years in child care, she’s been pushing for greater accessibility for all families.
“This is absolutely a relief for families. It’s been an uphill battle folks have been fighting for quite some time. What’s different now is the increase,” Johnson explained.
The law expands the current child and dependent care tax credit from 50 percent to 100 percent of the federal credit. It also increases the qualifying expenses a filer can claim, up to $10,000 for one dependent, and up to $20,000 for two or more dependents.
For example, a single parent making $75,000 per year with $5,000 in expenses for one kid would see an increase in their credit from $300 to $1,000 per year.
In another example outlined by the governor’s office, a married couple making $150,000 per year with $15,000 in expenses for two kids would see an increase in their credit from $600 to $3,000.
TMJ4 spoke with parents who are excited to hear about the bump.
“I’m overjoyed to see that increase and that support. A yearly $700 is an enormous credit and it means something significant in a particular month or even when you spread it over the year,” Shannon Brennan, a parent utilizing childcare, exclaimed.
Brennan said both she and her partner work full-time, and that a large portion of their income goes to child care.
They’re not alone either. According to a 2022 report by the Wisconsin Policy Forum, the average annual cost of child care for a four-year-old in Milwaukee County, assuming 52 weeks of care, was $12,142. The cost for an infant was $16,236.
“One of my friends did a master's at UWM because they have two kids and it was less prohibitive economically to pay for grad school and the student cost of childcare through UWM than it would be to enroll two kids in another childcare program,” Brennan explained.
While this law is a step towards more accessible child care, Evers urged lawmakers to make additional efforts in the future.
“While I’m grateful this important effort finally received bipartisan support, I want to be clear: Wisconsin needs urgent, long-term investments to further reduce out-of-pocket childcare costs for working families while making sure childcare providers can keep their doors open and lights on,” Gov. Evers said.
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