Child Tax Credit: which are the only states that will pay their own tax credit other than the IRS in 2025 | M.A.G.

The Child Tax Credit is financial aid intended to support families with children under 17 years of age. This benefit, which has been in effect since 1997, allows taxpayers to reduce the amount they must pay in income taxes based on the number of dependents they have. In simple terms, it is a deduction that alleviates the tax burden, especially for parents, helping them cover the costs associated with raising children.

The federal child tax credit has been key to combating child poverty, and its impact has been evident in recent years. In 2021, a temporary credit expansion, framed within the American Rescue Plan, significantly increased direct payments to families, resulting in a notable reduction in this negative indicator. According to studies from the Center on Poverty and Social Policy at Columbia University, the payments reduced child poverty rates by up to 30%. Despite these benefits, the federal credit expansion has an expiration date in 2026.

Under the current system, the federal child tax credit offers up to $2,000 for each dependent child, of which $1,600 is refundable, meaning parents can receive this amount even if they don’t owe taxes. However, this is not without change, and federal credits will return to their original amount of US$1,000 per retail if Congress does not act by 2026. Despite this uncertainty, some states have implemented their own versions of the Retail Tax Credit. Children, which provides an additional layer of support to families in the form of additional credits, the characteristics of which vary by jurisdiction.

Aside from the federal benefit, a total of 16 states have established their own child tax credits, providing residents of those areas with additional relief from the tax burden related to raising children. These credits are especially valuable in a context where breeding costs continue to rise. Jurisdictions that offer these benefits are: Arizona, California, Colorado, Idaho, Illinois, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Oklahoma, Oregon, Utah and Vermont.

Most of these state credits are refundable, meaning families can receive a refund even if they don’t owe taxes. However, amounts and eligibility criteria vary considerably from state to state. For example, in California, families can receive up to US$1,117 for each child under 6 years old, as long as their income does not exceed US$30,931. Instead, in Utah, the credit is US$1,000 per dependent between 1 and 3 years, but is reduced if household income exceeds certain thresholds.

• Arizona: US$100 per dependent child under 17 years of age, non-refundable.
• California: US$1,117 for each qualifying dependent child under 6 years of age, reimbursable. Income must be less than US$25,000 for the total amount; The amount is reduced for families with income between US$25,000 and US$30,931. You must also qualify for the state’s Earned Income Tax Credit.
• Colorado: Up to US$3,200 per qualified dependent under 16 years of age, refundable. The exact amount will vary depending on the child’s income, marital status, and age.
• Idaho: US$205 per dependent child under 17 years of age, non-refundable.
• Illinois: Credit equivalent to 20% of the state’s Earned Income Tax Credit for each child under 12 years of age, refundable.
• Maine: US$300 per child under 17 years of age, refundable.
• Maryland: US$500 for each qualifying child under 17 years of age, refundable. However, the minor must have a disability and the family’s adjusted gross income must be $6,000 or less to qualify.
• Massachusetts: US$180 for one dependent child under 12 years old or $360 for two or more, refundable. The credit also applies to adults age 65 or older or anyone with a disability.
• Minnesota: US$1,750 per child, refundable, for individual taxpayers earning US$29,500 or less, or US$35,000 for joint taxpayers.
• New Jersey: US$500 per child under 6 years of age for taxpayers earning less than $30,000, refundable. The credit decreases in $100 increments as income level increases, and the lowest credit, $100 per dependent, is available to those with incomes of $120,000 to $150,000.
• New Mexico: Between US$75 and US$175 per child under 17 years of age, depending on income level, refundable.
• New York: The credit is whichever is greater for the taxpayer: 33% of the portion of the federal child tax credit and the additional federal tax credit attributable to eligible dependents, or $100 multiplied by the number of children meet the requirements. The credit is refundable and children must be 16 years old or younger.
• Oklahoma: 5% of the federal child tax credit per household, non-refundable. Not available to married couples filing jointly with gross income over $100,000.
• Oregon: US$1,000 per dependent child under 5 years old, refundable. Available only to families earning less than US$30,000.
• Utah: US$1,000 per dependent child between 1 and 3 years old, non-refundable. The credit decreases by $10 for every $1 of income above a certain threshold: $27,000 for married people filing separately, $43,000 for single people or $54,000 for people filing jointly.
• Vermont: US$1,000 per dependent child under 5 years of age for taxpayers earning less than US$125,000, refundable.

Each state has specific requirements regarding the age of the child, the household’s income level, and whether or not the credit is refundable. It is important for taxpayers to check their state-specific details to ensure they meet requirements and maximize benefits.

Pedro Bustamante