Committee sends 'Great Start' child-care tax credit expansion to taxes committee

Representative Katiza Wintoun moved House File 1384, the "Great Start Child Care Tax Credit," asking the committee to re-refer the bill to the Committee on Taxes for further consideration.

The proposal would expand Minnesota's dependent-care tax credit to give additional credit for children under age 6. Under the draft described to the committee, the existing $3,000 cap for one qualifying dependent would receive an additional $7,000 when that dependent is a young child, yielding a $10,000 cap for one qualifying child under 6. For two qualifying young children the draft raises the combined cap by $14,000 and adds proportionally for three or more dependents. Sponsor remarks said the credit phases down for households above $125,000 of earned income and phases to zero above $400,000.

Claire Sanford, chair of government relations for the Minnesota Child Care Association, testified in support of the bill and described a mismatch she sees between licensed capacity and families' ability to pay. “We wholeheartedly believe that childcare needs to be made cheaper for families,” Sanford told the committee, adding that providers have unused capacity in some parts of the state because families cannot afford care.

Members asked technical questions about which expenses qualify, whether the proposal overlaps with existing child-care assistance and how the Department of Revenue could handle advance payments. Sponsor Katiza Wintoun said the department has advanced payments now for other child tax credits and she said she would take the issue of delivery to the tax committee. Representative Nadeau noted a fiscal estimate from previous drafts: a 2022 fiscal estimate for a related expansion was about $200 million per year.

After a brief question period the committee voted to re-refer House File 1384 to the Committee on Taxes for further work.