Expanding on a recent proposal by DFL. Gov. Mark Dayton, a Republican senator wants to offer a $1,000 non-refundable tax credit for families with young children to help offset the cost of child care.
The so-called Toddler Tax Credit, sponsored by Sen. Karin Housley, R-St. Mary's Point, would provide an estimated $500 million tax relief for families with children under the age of 5.
“The costs that go along with raising young children put a lot of financial strains on our families,” Housley said in a statement. “Any type of tax relief we can give these families will be a welcome break.”
Housley's proposal would have no income limits, unlike Dayton's proposal which would cap it $124,000 for households that claim the child-care tax credit.
The two proposals are aimed at addressing high child-care costs in Minnesota, where the cost of child care compared to median income makes the state the third-least-affordable in the country.
Child care costs most acutely affect single-parent households, according to a 2013 report by Child Care Aware, an industry group that compiles state-by-state data.
The average cost for child care annually was $13,876 for a single-parent household, eating up more than half of the parent’s annual median income, according to survey and census data. For married, two-parent households, the cost of child care annually ate up just more than 15 percent of their median income.