Child Tax Credit Update: 10 States Offering Their Own Benefits

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Vermont has become the latest state to introduce a child tax credit to aid families missing out on the discontinued federal Child Tax Credit, as GOBankingRates reported. Republican Gov. Phil Scott signed off on a $1,000 child tax credit for every child aged 5 and under for households earning less than $125,000.

The Green Mountain State joined nine other states who are in taking measures to make up for the lack in federal tax benefits available to its residents’ children. The program is expected to cost $32 million and benefit over 30,000 children in Vermont.  

When President Joe Biden enacted the American Rescue Plan Act in 2021, the $1.9 trillion economic relief and stimulus package also expanded the existing Child Tax Credit (CTC). The enhanced CTC provided most working American families with $3,000 per child under 18 years of age and $3,600 per child six and younger.

As of December 31, 2021, the refundable credit had helped 36 million households with 61 million children through monthly payments of between $250 and $300. More than 90% of all American children were eligible for the expanded credit, per Columbia University’s Center on Poverty & Social Policy.

However, the credit was enhanced for 2021 only, and with President Biden’s Build Back Better program declared dead after the program failed to gain approval in Congress earlier in 2022, the Child Tax Credit has reverted to its original maximum amount of $2,000 per child, putting many back into poverty.

According to the Center on Poverty & Social Policy research, the child poverty rate rose to 17% in January 2022 from 12.1% in December 2021, its highest rate since the end of 2020.

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The data shows that the 41% child poverty rate increase places 3.7 million more children in poverty due to the termination of the federal Child Tax Credit monthly payments. Latino and Black children experienced the largest percentage-point gain in poverty (7.1% and 5.9%, respectively). Columbia estimates that 10 million children are at risk of falling into or deeper into poverty.

Of the 10 states offering credits, seven have made them refundable and all 10 differ greatly in the amount of tax credit and eligibility requirements depending on a child’s age and household income.

For example, the Colorado Child Tax Credit is similar to the federal credit but it will be available for Colorado residents to claim on their 2022 state tax return when they file in 2023. Children under age six who qualified for the federal Child Tax Credit will qualify for Colorado’s child credit.

In Maine, the state government has approved an initial round of $850 stimulus checks for residents who have already filed their tax returns for 2021. Anyone in the state who files their returns later will see their checks delayed, with October 31 being the last date to file the returns.

The 10 states currently offering state-level child tax credits are listed below, with details provided by National Conference of State Legislatures data. To figure out if your household qualifies, contact your state government or check out your state’s website.

StateProgram NameTax Credit AmountEligibilityRefundable
CaliforniaYoung Child Tax Credit$1,000 to each qualifying family with earnings under $25,000, reduced credit of less than $1,000 to each qualifying family with earnings between $25,000 to $30,000Only available for children under age 6 and must qualify for the California Earned Income Tax CreditYes
ColoradoChild Tax CreditBeginning Jan. 2023, 5% to 30% of the federal credit for each qualifying child (depends on income and filing status)Only available for children under age 6Yes
IdahoChild Tax Credit$205 per qualifying childQualifying child is defined by section 24(c) of the Internal Revenue CodeNo
MaineDependent Exemption Tax Credit$300 per qualifying child and dependentSame as federal Child Tax CreditNo
MarylandChild Tax Credit$500 per childChildren under the age of seventeen must have a disability and taxpayers’ federal adjusted gross income must be $6,000 or lessYes
MassachusettsHousehold Dependent Tax Credit$180 for one dependent, $360 for 2 or more dependent“Dependents” are considered children under 12 years old, adults 65 or older, and anyone with a disabilityYes
New MexicoChild Income Tax Credit$75 to $175 per qualifying child, depending on incomeAny minor child or stepchild of the taxpayer who would be a qualifying child for federal income tax purposesYes
New YorkEmpire State Child Tax CreditThe greater of: 33% of the portion of the federal child tax credit and federal additional child tax credit attributable to qualifying children OR $100 multiplied by the number of qualifying childrenChild must be at least age 4 and must qualify for the federal child tax creditYes
OklahomaChild Tax Credit5% of federal creditTaxpayers’ federal adjusted gross income cannot exceed $100,000 for married couples filing jointlyNo
VermontChild Tax Credit$1,000 child tax creditFor every child aged 5 and under to households earning under $125,000Yes
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