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Bill

SB 1074

Relating to: refundability of the additional child and dependent care tax credit and making an appropriation. (FE)

2025-2026 Regular Session Introduced by Kristin Dassler-Alfheim and 4 co-sponsors

Wisconsin bill makes child and dependent care tax credit refundable, allowing eligible families to receive payments exceeding taxes owed rather than only reducing liability.

Failed to pass pursuant to Senate Joint Resolution 1
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WeVote Research Nonpartisan
Bill Summary · SB 1074

Legislative bill overview

SB 1074 would make Wisconsin's additional child and dependent care tax credit refundable, meaning taxpayers could receive payments exceeding their tax liability rather than just reducing taxes owed. The bill includes a fiscal appropriation to fund this expanded tax credit benefit.

Why is this important

Currently, non-refundable tax credits only benefit taxpayers with sufficient tax liability to claim them, often excluding lower-income families who need child care support most. Making the credit refundable would ensure eligible families receive the full benefit regardless of their income level, potentially increasing access to affordable child care and reducing financial barriers for working parents.

Potential points of contention

  • Fiscal cost and state budget impact: Converting a credit to refundable status significantly increases government expenditure; lawmakers will debate whether this aligns with budget priorities and requires offsetting cuts elsewhere
  • Income threshold definitions: Questions about who qualifies (income limits, family size, care type) and whether the credit is properly targeted to intended beneficiaries versus potentially benefiting higher-income households
  • Work incentive effects: Disagreement over whether refundable credits effectively encourage workforce participation or create unintended dependency on government support

Compiled from official sources — confirm details with the bill’s official record.

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