Federal and state child tax credits have historically received bipartisan support. These tax credits for families with children under age 17 provide financial relief for low-income families and their children and support economic mobility.
New Jersey, Vermont, and Rhode Island, for example, have recently chosen to use American Rescue Plan Act (ARPA) funds to enact state-level child tax credits.
During the 2022 legislative season, state advocates worked hard to ensure that state-level child tax credits would be considered. Thanks to advocacy efforts from parents and child care professionals, Alliance allies at Advocates for Children of New Jersey (ACNJ) celebrated strong wins for the 2023 budget year, such as the Young Child Tax Credit, a refundable tax credit of up to $500 per year for families with children under age 5 and earning less than $80,000 per year. Voices for Vermont’s Children helped pass a refundable child tax credit of $1,000 for children 5 and under with an income threshold of $125k, which will take effect in 2023. Vermont lifted research showing the short- and long-term benefits of increasing incomes for children in poverty via social media posts and testimony to legislators. Rhode Island passed a “one-time only” child tax credit this year of $250/child for up to three children for single parents making $100,000 or less or couples making $200,000 or less. Rhode Island advocates will continue to promote a larger and expanded future investment for children and families. Looking ahead to 2024, California and New York have introduced legislation to expand their current state-level child tax credits.
To learn more about state level child tax credits, check out this overview from the National Conference of State Legislatures, updated in July.