State Lawmakers Hold Hearing on Republican Bill Providing Incentives for Business Helping Their Employees With Childcare

Friday, December 1st, 2023 -- 10:00 AM

(Madison Lammert and Hope Karnopp, Milwaukee Journal Sentinel) Lawmakers held an Assembly committee hearing Wednesday for a Republican-led bill that aims to incentivize business to help their employees find and pay for child care, which they think could encourage more parents to enter the workforce.

According to Madison Lammert and Hope Karnoppwith the Milwaukee Journal Sentinel, the bill would establish state tax credits for businesses who help their employees access child care.

Democrats and Republicans on the committee that heard the bill agreed that the tax credits would not completely solve the state's child care supply and affordability problems, but would be a step in the right direction.

The bill is "by no means a magic bullet," said Rep. David Armstrong, R-Rice Lake, who introduced the bill. He said that at a recent meeting with businesses in his county, "all 22 employers' hands went up" indicating they would be interested in starting a child care or helping their employees pay for child care slots at existing programs.

"With less child care slots available and many parents being priced out of the market, we're losing much-needed participants in our workforce. One way to help address this is to get our business community involved," said Sen. Dan Feyen, R-Fond du Lac, another author of the bill.

The bill would establish a state tax credit for employers, up to $100,000, for costs involved with creating a child care program for its employees. Alternatively, an employer could receive this credit by making a contribution to a nonprofit to operate the program.

Under the bill, employers could also receive a state tax credit of up to $3,000 per employee's child for subsidizing the cost of child care, operating expenses for the program and certain administrative costs.

The employer would have to pay at least half of the employees' child care costs in order to receive this credit. The credits specified in the bill are refundable, meaning that if the credit is more than the employer owes in taxes, the employer receives a refund of the difference. The bill goes further than an existing federal credit, which has a limit of $150,000 and 25% of qualified costs.

Lawmakers at Wednesday’s hearing also discussed another Assembly bill that would alter the business development tax credit to allow a business owner to claim tax benefits up to 15% of their investment to establish a child care program for its employees.

Feel free to contact us with questions and/or comments.