Stimulus Update: Residents of These States Could Still Receive a Child Tax Credit

Two Filipino parents and their three children enjoy huge waffle ice cream cones on a California boardwalk by the beach.
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Americans hoping that the federal child tax credit would be extended as part of the recently passed Inflation Reduction Act got some disappointing news, as the final version of the bill passed into law by President Joe Biden did not include further CTC funding.

Fortunately, that doesn’t mean the credit isn’t still available in the United States. Twelve states have either updated or initiated their own child tax credit initiatives, the Motley Fool’s Ascent website reported. Most state-run CTCs are earmarked for low-income households.

The federal CTC became available to qualifying families through the American Rescue Plan Act and provided up to $3,000 per child per year for families with children under the age of 6. For families with children ages 6 to 16, the credit was $3,600 per child per year.

The Biden administration hoped the program would last until at least 2026, but the U.S. Senate voted against extending the expanded CTC. Meanwhile, U.S. House efforts to include it in the Inflation Reduction Act fell short, according to the New Mexico Political Report.

With the federal version no longer available, the main option now is to apply for state CTC programs. These are the states that currently offer their own CTC programs: California, Colorado, Connecticut, Idaho, Maine, Maryland, Massachusetts, New Jersey, New Mexico, New York, Oklahoma, Rhode Island and Vermont.

Eligibility requirements vary by state and are based mainly on factors such as the age of the child and family income, Ascent noted, citing data from the National Conference of State Legislatures.

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For example, in California, the Young Child Tax Credit is available to children under age 6 who qualify for the California Earned Income Tax Credit. In Maryland, the state CTC is available to children under the age of 17 with a disability, with a further requirement that household adjusted gross income (AGI) be $6,000 a year or less.

Connecticut has one of the higher income limits, with the state CTC available to single tax filers who earn up to $100,000 a year; head of household filers who earn up to $160,000; and joint filers who earn up to $200,000. The Connecticut credit is phased out at a rate of 10% for every $1,000 over the income thresholds.

The amount of the credit also varies by state. Vermont, for example, offers a monthly credit of $1,000 per child for children under the age of 5 with a family income below $125,000 a year. In contrast, New Mexico offers credits of $75 to $175 per child, depending on the household income.

Some states offer credits linked to the federal CTC. For instance, in New York, the state credit is either 33% of the federal CTC or $100 per qualifying child, whichever is greater. In Colorado, the state credit is 5% to 30% of the federal credit for each qualifying child.

Not all of the state CTC programs are up and running yet — including Colorado’s, which is set to begin in January 2023. If you live in one of the states listed above, contact the agency in charge of public relief programs for more information.

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