Walz proposes expanded dependent-care tax credit to cut childcare costs for more than 100,000 families

Gov. Tim Walz proposed a substantial expansion of Minnesota—s dependent-care tax credit, saying the change would lower childcare costs for more than 100,000 families.

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In the State of the State, Walz said he was "proposing a significant expansion of the dependent care tax credit for more than 100,000 Minnesota families with younger school-aged kids, lowering the cost of childcare by $3,000 for families with one child and $6,000 for families". He framed the credit as an urgent affordability measure for parents facing rising childcare costs.

The proposal was presented as part of a broader affordability agenda that included prior tax cuts and direct rebate checks. Walz did not provide legislative language or an implementation timeline during the address; he asked lawmakers to "come together and figure out" whether such a change can be enacted this session.

Why it matters: Advocates and families have identified childcare cost as a primary barrier to workforce participation. Walz—s proposal would target relief directly to households with dependent children, but details on eligibility, phaseouts and how the credit would interact with federal benefits were not specified in the address.

What's next: Walz asked the Legislature to consider the credit this session and to send bills to his desk. No committee hearings or bill numbers were cited in the joint convention remarks.

Attribution: Quotes and policy claims in this article are drawn from Governor Tim Walz's State of the State address as delivered to a joint convention of the Minnesota Legislature (see provenance).