For many Wisconsin families, the cost of quality daycare can feel overwhelming. Understandably, child care is a burden on family budgets, and the state is expanding the Child and Dependent Care Tax Credit to allow families to lessen that financial burden.
The Wisconsin daycare tax credit mirrors the federal program but provides a state-level benefit to families with work-related childcare expenses. Beginning with 2024 taxes, the new law increases the state credit to 100% of the federal Child and Dependent Care Credit. For most families, that means a maximum benefit of up to $3,500 for one qualifying dependent or $7,000 for two or more, depending on income and expenses. More than 110,000 Wisconsin taxpayers are expected to benefit, gaining an average of $656 in additional tax relief.
To qualify for the Wisconsin daycare tax credit, taxpayers must:
For families asking if the dependent care credit is refundable, the Wisconsin version is non-refundable, but unused credits can help reduce your tax liability to zero.
Eligible expenses generally include daycare tuition, before- and after-school programs, and certain preschool or day camp costs, as long as the care is provided to allow the parent or guardian to work or look for work. The dependent care credit limit is tied to income; higher earners may see a gradual phase-out.
If you’re wondering, “How much day care can you write off?” or “How much day care can you claim?” the IRS generally allows up to 35% of $3,000 for one child or $6,000 for two or more as qualifying expenses under Tax Form 2441. Wisconsin applies its own percentage based on your federal credit.
To claim the Wisconsin daycare tax credit, complete Schedule WI-2441, Child and Dependent Care Expenses, using information from your federal Form 2441. Report all qualifying expenses and the provider’s tax identification number (TIN). Attach the completed form to your Wisconsin income tax return. For full guidance, visit the UW-Extension’s Tax Credits for Wisconsin Families resource.
At Little Sprouts Academy, families find more than just a daycare—they discover a community devoted to early learning, play, and growth. Our infant care, toddler care, preschool, and Pre-K programs combine supportive care with a structured educational setting to help Wisconsin parents feel balanced and at ease while managing their work-life balance. Schedule a tour today to see how Little Sprouts can benefit your family.
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