Gov. Dayton proposes $100 million for expanded child care tax credit

Gov. Mark Dayton
MinnPost file photo by James Nord
Gov. Mark Dayton

Gov. Mark Dayton has proposed an expansion of the state’s child and dependent care credit, which, if approved by the Legislature, would provide nearly $100 million in tax relief to families.

According to the governor’s office, the plan would  allow more middle-income families to claim a refundable tax credit for costs associated with child care, and dependent care for family members who are aging, or have a disability.

The current law provides tax credits under the Child and Dependent Care Credit to 38,000 Minnesota families. Under the new plan, the number of those eligible would expand to 130,0000. 

If approved, the average family would receive $481 under the new plan, with a maximum tax credit of $2,100 per year.

The governor said in a statement about the proposal:

“Rising childcare costs have put hard financial strains on many Minnesota families, making it increasingly difficult for working parents to hold their jobs while assuring quality care for their children. My Child Care Tax Credit helps to provide Minnesota families with options – so they don’t have to choose between working and caring for their families.”

The governor’s office offered these numbers related to the plan:

  • 38,000 – Number of families currently eligible for the tax credit
  • 92,000 – Number of new families eligible under the Governor’s proposal
  • 130,000 – Number of families eligible for the tax credit under the Governor’s proposal
  • $39,000 – Under current law, a family must make less than $39,000 to be eligible
  • $124,000 – Under the Governor’s proposal, a family with two or more children earning less than $124,000 would be eligible for the tax credit
  • $2,100 – Maximum tax credit a family could receive under the Governor’s proposal
  • $481 – Average tax credit per family under the Governor’s proposal

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Comments (3)

  1. Submitted by Rebecca Wentz on 01/21/2015 - 08:32 am.

    child care credits

    Come on!!! Seriously!!!?? People with children already get so many credits they technically don’t pay taxes! The money comes out of their paychecks throughout the year, but at the end of the year when we file our taxes, they get EVERYTHING back plus thousands!! So where does the tax burden truly lie?! It lies with those who don’t have children! Those of us whose children are grown and out of the home or those who have not yet had children are the ones who are paying the majority of the taxes in this country right now! And now there is more coming?! What about us?! The senior citizens, middle aged whose children are grown and not in college, and those just getting out of college without children?!! Our senior citizens get very few tax breaks, and most end up paying in at the end of the year how is that fair?! Then there are those who make $20,000 a year and still don’t get any credits?! This is starting to get really old!! I am sick to death of more and more breaks for the middle class, and I have been seriously thinking about attempting a class action suit against the government for class bias. In this day and age it is happening more and more as there is more focus on the middle class who really need to learn to budget their money and control their spending!! End the credit cards and pay out right for their expenses. In reality the majority of the middle class buys almost everything on credit instead of spending within their means. That means that that car they own they don’t really own same with the house the furniture the clothing etc you get my drift. How many people out there actually own their car outright? How many people can say they are free from credit card debt? Not many! So the more we give the middle class breaks the more they spend and yes while we do need a strong middle class we need a smaller gap between the middle class and the working poor, or there will be more trouble! STOP GIVING MORE TO THE MIDDLE CLASS!!!! They don’t need any more!!! How about we put our focus on us hard working Americans who live below the poverty line have already put in more than 20 years of work history or are close to retirement! We need tax breaks too!!! Just because we don’t have kids in our home shouldn’t mean that we don’t count anymore!!! The middle aged and seniors already paid our fair share and now its time for us to get some relief!!! I have watched my mother and many elders across this state alone who are well past retirement age who are still working because they cannot afford to retire!!! Then comes the end of the year and in most cases if they are working have to pay in thousands of dollars every year!!! So get off the middle class band wagon and worry about the rest of your constituents throughout the state!!! I voted for you Gov. Dayton now work for me!!! That’s the job you were given to be the voice of ALL the people not just the middle class!!!!

  2. Submitted by Carolyn Jones on 01/21/2015 - 09:11 am.

    Why do we have to provide tax credits for the top 10-15% of wage earners. Just lower taxes and stop social engineering to buy votes. Where is the middle class? You are so poor at $94,000 that we have to provide you health insurance. You are so poor at $125,000 that we have to provide child care credits, yet you are so rich at $250,000 that we have to tax you at 53.25% in Minnesota. This is crazy!!! Politicians stop using our money to buy votes and keep yourselves in power. Please spend wisely and lower taxes.

  3. Submitted by Dennis Tester on 01/21/2015 - 01:32 pm.

    College costs redux

    When the child care providers realize that their client families are being subsidized by the state, what do you think is going to happen to child care costs in this state?

    What’s going to happen? The same thing as what happened when colleges realized that easy student loans and generous Pell Grants meant they could increase tuition and other costs accordingly.

    “According to data from the Labor Department, the price index for college tuition grew by nearly 80 percent between August 2003 and August 2013. That is nearly twice as fast as growth in costs in medical care, another area widely recognized for fast-rising prices. It’s also more than twice as fast as the overall consumer price index during that same period.”

    And now the same politicians are talking about increasing the subsidies for college or even excusing student loans altogether!

    If you want to increase the cost of something, subsidize it. – Econ 101

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