WWW.CNET.COM
Is Your State Offering a Child Tax Credit? Minnesota Debuts Big Early Payouts in 2025
You might already know about the federal child tax credit and have a plan to claim it in 2025, but did you know your state might also offer its own child tax credit? In some cases, these state-level offerings can net you thousands of dollars more per child, and if you live in Minnesota, a new program could net you even more throughout the year.Either at the state or the federal level, child tax credits can offer a financial lifeline to parents, helping to put money into their pockets each year for each child they have. While the temporary expansion of the federal child tax credit is set to expire in 2026(PDF) unless Congress acts to extend it, parents in a handful of states might also be eligible for additional state-level credits, though the amounts offered and the requirements for eligibility vary by quite a bit.The impact of child tax credits has been considerable, even just in the last few years, with studies into the 2021 temporary expansion of the federal credit finding that it was a significant factor in reducing childhood poverty. Columbia University's Center on Poverty and Social Policy found that the payments reduced the monthly rates of child poverty by nearly 30%, with payments reaching roughly 61 million children.Read on to find out if your state offers a child tax credit and whether your family qualifies for it. For more on taxes, find out how the IRS might be handling payment apps and how new income tax brackets might affect you.What is a child tax credit?With a child tax credit, eligible tax payers may be able to reduce their income tax based on how many children they claim as dependents.First introduced in 1997, the federal-level credit currently offers $2,000 per child, with only $1,600 of that amount being refundable, which means that you can receive that amount even if you don't owe that much in taxes. The remaining $400 is nonrefundable, so it can only be used to lower your tax burden.The federal credit's current value was set by the American Rescue Plan Act of 2021, which temporarily bumped the credit through Dec. 31, 2025. After that date, without any additional expansion by Congress, the credit is set to revert to its previous amount: $1,000, nonrefundable, per dependent child under 16.Which states offer a child tax credit?Whatever happens to the federal child tax credit by 2026, parents in the following 16 states can rest a little easier knowing that they might also be able to get a state-level credit: Arizona, California, Colorado, Idaho, Illinois, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Oklahoma, Oregon, Utah and Vermont.However, the specifics of these credits -- including how much they are worth, how much is refundable and what counts as a dependent child -- will vary greatly depending on the state.What is Minnesota's child tax credit advance payment option?On Tuesday, Minnesota Gov. Tim Walz unveiled a new child tax credit option available to taxpayers in the North Star state known as "advance payment." If a Minnesota resident who's eligible for the state credit files for this new option during the 2025 tax season, not only will they receive their full credit for that year as usual -- the amount of which you can find below -- but they will also receive the credit they would receive in 2026 early. According to the new policy, the advance payment of the next year's child tax credit will be paid in increments throughout the second half of 2025."The goal of this nation-leading tax credit is to lower child poverty and provide tax relief for working-class families in Minnesota," Walz said. "With the advance payment option, we're making it easier for families to manage their annual household budget. This new option will increase financial freedom and ensure families have the support they need all year long."How much is each state child tax credit and who is eligible?Here are the 16 states offering child tax credits as of October 2024, according to theNational Conference of State Legislatures. Eligibility and amount varies by state, with 12 of the states making the credit refundable, so you can get a refund even if you don't owe tax.Arizona: $100 per dependent child under the age of 17, nonrefundable.California: $1,117 per qualifying dependent child under the age of 6, refundable. Income must be under $25,000 for full amount, amount reduced for families with income between $25,000 and $30,931. Must also qualify for the state's Earned Income Tax Credit.Colorado: Up to $3,200 per qualifying dependent under the age of 16, refundable. Exact amount will vary based on income, filing status, and the age of the child.Idaho: $205 per dependent child under the age of 17, nonrefundable.Illinois: Credit worth 20% of the state's Earned Income Tax Credit per dependent child under the age of 12, refundable.Maine: $300 per dependent child under the age of 17, refundable.Maryland: $500 per qualifying dependent child under the age of 17, refundable. However, the child must have a disability and the family's adjusted gross income must be $6,000 or less to qualify.Massachusetts: $180 for one dependent child under the age of 12, or $360 for two or more, refundable. Credit also applicable for adults 65 or older or anyone with a disability.Minnesota: $1,750 per dependent child, refundable, for individual filers making $29,500 or less, or $35,000 for joint filers.New Jersey: $500 per dependent child under the age of 6 for taxpayers making less than $30,000, refundable. Creditdecreases in increments of $100 as income bracket increases, with the smallest credit, $100 per dependent, available to those with income of $120,000-$150,000.New Mexico: Between $75 and $175 per dependent child under the age of 17, depending on income level, refundable.New York: Credit is whichever value is higher for the taxpayer: either 33% of the portion of the federal child tax credit and federal additional child tax credit attributable to qualifying children, or $100 times the number of qualifying children. Credit refundable, children must be 16 or younger.Oklahoma: 5% of the federal child tax credit per household, nonrefundable. Not available for married couples filing jointly with gross income over $100,000.Oregon: $1,000 per dependent child under the age of 5, refundable. Only available for families making less than $30,000.Utah: $1,000 per dependent child between the ages of 1 and 3, nonrefundable. Credit decreases by $10 for every $1 of income over a certain threshold: $27,000 for married filing separately filers, $43,000 for single filers or $54,000 for joint filers.Vermont: $1,000 per dependent child under the age of 5 for taxpayers making less than $125,000, refundable.For more, check out CNET's pick of thebest tax software you can get in 2024.
0 Comentários 0 Compartilhamentos 29 Visualizações