Fourteen states will offer Child Tax Credits (CTCs) in 2024 to reduce poverty, boost economic security, and invest in children. Five states will offer refundable credits at or above $1,000 per qualifying child.
That is why lawmakers should consider:
- making their credits fully refundable
- not including an earnings requirement
- setting a maximum amount per child instead of per household
- Setting state-specific phase-out ranges that target low- and middle-income families
- Indexing to inflation and offering the option of advanced payments.
CTCs are an effective tool to strengthen the economic security of low- and middle-income families.
More state lawmakers are choosing to help families in this way, and these credits constitute an annual multibillion-dollar investment in the next generation.
Here are some specific examples of the state CTCs:
- California will offer a fully refundable CTC of up to $1,083 per child under age six and up to $795 per child ages 6-17.
- Colorado will offer a fully refundable CTC of up to $1,000 per child.
- Maine will offer a fully refundable CTC of up to $1,000 per child.
- Maryland will offer a fully refundable CTC of up to $1,000 per child.
- Massachusetts will offer a fully refundable CTC of up to $1,000 per child.
These are just a few examples of the many state CTCs available 2024. As more states consider creating or strengthening these credits, lawmakers should design them for maximum impact.
Here are some specific ways that lawmakers can design Child Tax Credit for maximum impact:
- Make them fully refundable: Families with no income can claim the credit.
- Do not include an earnings requirement: Low-income families can still claim the credit.
- Set a maximum amount per child: This will ensure the credit is targeted to low- and middle-income families.
- Set state-specific phase-out ranges: This will ensure the credit is phased out gradually as families’ incomes increase.
- Inflation index: This will ensure that the credit keeps pace with rising costs.
- Offer the option of advanced payments: This will give families the money they need sooner.
- By designing Child Tax Credits for maximum impact, lawmakers can help to reduce poverty, boost economic security, and invest in the next generation.
