Changing the name of the earned income tax credit. (FE)
The impact of SB227 is significant, as it not only changes the terminology but also reinforces the importance of child care assistance in the broader context of tax relief for families. This reform can potentially lead to increased awareness and more effective utilization of the credit among eligible families. By framing the credit as a child care benefit rather than merely an income tax relief option, the bill aims to address the needs of working families who rely on child care services, thus positioning the state as supportive of family welfare and financial stability.
Senate Bill 227 seeks to rename the earned income tax credit (EITC) to the earned income child care tax credit in Wisconsin. This legislative change is part of a broader strategy to emphasize the credit's role in providing financial assistance specifically to low-income families with dependent children. The bill retains the existing structural framework of the EITC, which calculates the credit as a percentage of the federal EITC, ensuring that families continue to receive tax relief based on their qualifying children. Those with one child receive 4 percent, two children receive 11 percent, and those with three or more children receive 34 percent of the federal credit amount.
While the bill presents a positive rebranding of the EITC to more accurately reflect its intentions, some stakeholders may raise questions about the adequacy of the credit itself. There are discussions surrounding whether the existing percentages adequately address the high costs associated with child care and the overall financial burden faced by low-income families. Critics might argue that while the name change is a step in the right direction, it should be accompanied by a reevaluation of the credit's rates to ensure that they meet the current economic realities faced by families and aid their child care needs.