As the next tax season approaches (yes, there’s nothing we can do to avoid it), families across the U.S. may have a chance to boost their finances through federal and state-level Child Tax Credits (CTC). While the federal program provides up to $2,000 per dependent child, residents in 16 states could qualify for additional state-specific credits. These programs vary widely in qualification criteria and amounts, but they offer a significant financial lifeline to parents.
Child Tax Credits have long been recognized as essential tools for reducing child poverty. During the temporary federal expansion in 2021, poverty rates among children fell by nearly 30%, reaching 61 million children nationwide. While the federal credit is set to revert to its pre-2021 value of $1,000 in 2026 unless Congress acts, many states have stepped in to provide supplemental credits, ensuring that families receive additional support.
How does the Child Tax Credits work?
Child Tax Credits allow eligible taxpayers to reduce their income tax liability based on the number of dependent children they claim. Currently, the federal credit provides $2,000 per child, of which $1,600 is refundable, meaning taxpayers can receive that amount even if their tax bill is lower.
The remaining $400 is non-refundable, applying only to tax owed.
In addition to the federal credit, some states now offer their own versions, with widely differing amounts and eligibility rules. These state programs can supplement federal benefits or provide relief for families who do not qualify for federal aid.
Which states offer additional CTC in the next months?
Residents of 16 states may qualify for state-level credits in addition to the federal program. The eligibility criteria and refundability of these credits vary:
- Arizona: $100 per child under 17; non-refundable.
- California: Up to $1,117 per child under 6; refundable. Strict income limits apply.
- Colorado: Up to $3,200 per child under 16; refundable, based on income and filing status.
- Idaho: $205 per child under 17; non-refundable.
- Illinois: 20% of the state Earned Income Tax Credit (EITC) for children under 12; refundable.
- Maine: $300 per child under 17; refundable.
- Maryland: $500 per child under 17 with a disability, for families earning less than $6,000; refundable.
- Massachusetts: $180 per child under 12, or $360 for two or more; refundable.
- Minnesota: $1,750 per child for low-income families earning under $29,500 (single) or $35,000 (joint); refundable.
- New Jersey: $500 per child under 6 for families earning under $30,000; refundable. Reduced amounts for incomes up to $150,000.
- New Mexico: $75 to $175 per child under 17, based on income; refundable.
- New York: Either 33% of the federal CTC or $100 per child under 16, whichever is higher; refundable.
- Oklahoma: 5% of the federal credit; non-refundable. Income caps apply.
- Oregon: $1,000 per child under 5 for families earning less than $30,000; refundable.
- Utah: $1,000 per child aged 1-3; non-refundable. Reductions apply for higher-income families.
- Vermont: $1,000 per child under 5 for families earning under $125,000; refundable.
Refundable credits, like those in California, Vermont, and Colorado, are particularly impactful because they provide financial relief to families regardless of their tax liability. By contrast, non-refundable credits, such as those in Arizona and Utah, are limited to reducing existing tax obligations and exclude families who owe no taxes.
Low-income families often benefit the most from refundable credits. For example, Minnesota offers a generous $1,750 per child for families earning below specific income thresholds, providing critical support to the state’s most vulnerable residents.