VIDEO: “Toddler Tax Credit” is a tax cut for families
Senate Republicans unveiled yet another tax cut plan to help return the state surplus to hardworking taxpayers. Minnesota families endure one of the highest costs of childcare in the nation, and even those parents fortunate enough to stay home with young children make significant financial sacrifices to do so.
The “Toddler Tax Credit,” sponsored by Senator Karin Housley (R-St. Mary’s Point), would provide a $1,000 tax break for each qualifying child, adding up to nearly $500 million in tax relief for families over the next two years.
“The costs that go along with raising young children put a lot of financial strains on our families,” said Senator Housley. “Any type of tax relief we can give these families will be a welcome break.”
There is good reason to believe this proposal may gain traction in the legislature. Governor Dayton has already proposed a childcare tax credit, but it would only benefit families that incur childcare expenses and fall under a certain income threshold. The Senate Republican plan expands on that concept by including all families with children 0-4 years old who pay taxes in the state of Minnesota.
The “Toddler Tax Credit” is modeled after the federal child tax credit. It would be non-refundable, have no income limits, and lower the tax burden on the families of an estimated 250,000 Minnesota children.
“Gov. Dayton’s plan helps families who pay for childcare expenses, but our plan helps all young families with the costs of raising young children,” added Senate Republican Leader David Hann (R-Eden Prairie).
This proposal is one of three tax cuts Senate Republicans have proposed. The other two eliminate state income taxes for Social Security benefits and veteran’s pensions.
“The budget surplus tells us the state is collecting too much money – what better way to give it back than to help young families when they are just starting out?” added Senator Housley.