Tax season brings an opportunity for parents and guardians in various states to enhance their returns through state-level Child Tax Credits (CTC), in addition to the federal CTC, which offers up to $2,000 per child. This year, part of the federal benefit, known as the “Additional Child Tax Credit” worth up to $1,600, requires meeting a specific earnings threshold. The IRS stipulates that individuals cannot earn more than $200,000, or $400,000 for joint filers, to claim this credit.
State-Specific Child Tax Credits
Minnesota: A Leader in CTC Value Minnesota’s CTC stands out for its value. Signed into law by Governor Tim Waltz in 2023, this fully refundable credit offers $1,750 per qualifying child. However, eligibility is based on income limits, which vary based on the number of children and filing status. For single filers, the income limit starts at $46,995 for one child and increases with each additional child. Joint filers have slightly higher limits, starting at $52,495 for one child.
California’s Young Child Tax Credit In California, the Young Child Tax Credit provides $1,117 per qualifying child under six. Remarkably, there’s no minimum income requirement, making this credit available even to unemployed parents. The income ceiling to claim this credit is $30,931.
Oregon’s Focus on Young Families Oregon’s Oregon Kids Credit benefits families earning under $30,000, with the full $1,000 credit per qualifying child available to those earning $25,000 or less. The credit applies to up to five dependents, aged five or younger by the end of 2023.
New Jersey’s Income-Sensitive CTC New Jersey also offers a $1,000 CTC, but this is limited to families with incomes of $30,000 and children aged five or under.
Vermont’s Higher Income Limits Vermont’s CTC is $1,000 per child under five, with notably higher income limits than other states. Full credit is available to those earning up to $125,000, and a partial credit extends to incomes up to $175,000.
New Mexico’s Progressive CTC New Mexico’s expanded CTC in 2023 offers a range from $600 to $25 per child, depending on income. This progressive credit is designed to provide more significant benefits to lower-income families.
Colorado and New York: Proportionate to Federal CTC Colorado’s Child Tax Credit ranges from ten to sixty percent of the federal CTC, catering to families with dependents under six and incomes below $75,000 ($85,000 for joint filers). New York’s Empire State Child Tax Credit provides thirty-three percent of the federal CRC or $100 per qualifying child, with varying income limits based on filing status.
Maine and Maryland: Focused on Child and Dependent Care Maine’s CTC is twenty-five percent of the federal Child and Dependent Care Credit, with a maximum of $500, focusing on childcare expenses. Maryland’s version offers thirty-two percent of the federal credit, with a reduced amount for higher earners.
Conclusion These state-level CTCs provide essential financial relief for families, helping them manage the costs associated with raising children. As each state has its specific criteria and limits, it’s crucial for taxpayers to understand the requirements to maximize their benefits during tax season.
