Wisconsin Employers May Qualify for New Childcare Tax Credit

Mikaela Steckelis , Emmerson Mirus | 04.21.26

Wisconsin employers that provide childcare to employees may be eligible for a newly enacted state tax credit. Enacted on April 6, 2026, 2025, Wisconsin Act 183 creates a new employer-provided childcare tax credit, effective for tax years after December 31, 2025. The credit is limited to expenditures at Wisconsin-based childcare facilities and services. 

Eligible employers (including taxpayers filing individual income taxes, corporate franchise and income taxes, or insurers filing taxes) may claim a credit equal to that already provided under federal law: 

• Forty percent (or fifty percent for small businesses) of qualified childcare expenditures; and 
• Ten percent of qualified childcare resource and referral expenditures.

Each employer can claim a total credit of up to $500,000 (or $600,000 for small businesses) per tax year, as adjusted for inflation. For definitions of ​“qualified childcare expenditures” and ​“qualified childcare resource and referral expenditures,” see Section 45F of the Internal Revenue Code.

Partnerships, limited liability companies, and S corporations cannot take the new credit as part of their entity’s tax returns. However, these entities must compute and provide credit information to each partner, member, or shareholder, who may claim the credit in proportion to their ownership interest on their individual income taxes. For partnerships, the amount of the credit computed and passed through to the partners is included in the partnership’s income. 

If you have questions about whether your employee childcare expenditures qualify for this new tax credit, please contact the authors or primary Boardman Clark attorney with whom you work, or call us at (608) 257‑9521 to speak with one of our business or tax attorneys.

• Taxation