Child Tax Credits are a crucial tool for bolstering the economic security of low- and middle-income families and can significantly reduce child poverty when well-designed. In 2024, 14 states are offering CTCs that are particularly aimed at benefiting families in need, ensuring that children from the lowest-income households receive full benefits. This collective effort marks a significant investment in the next generation.
States with fully refundable CTCs include California, Colorado, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Oregon, while Vermont. Idaho, Oklahoma, and Utah provide nonrefundable credits.
This year, Minnesota, Oregon, and Utah launched new CTCs, while seven other states expanded their existing ones. Additionally, Arizona introduced a one-time nonrefundable child tax rebate.
These state CTCs have reached unprecedented levels, with five states-Colorado, Minnesota, New Jersey, Oregon, and Vermont-offering refundable credits of $1,000 or more per qualifying child. Altogether, these initiatives represent a multibillion-dollar investment in children's well-being.
To maximize the impact of these credits, lawmakers should ensure they are fully refundable, eliminate earnings requirements, set a maximum amount per child instead of per household, create state-specific phase-out ranges to target low- and middle-income families, index the credits to inflation, and consider offering advanced payment options.
These newly implemented and expanded credits, except for Arizona's 2023 rebate, Oregon's credit (expiring in 2029), and New Mexico's credit (expiring in 2032), are intended to be permanent.
Five states - Colorado, Minnesota, New Jersey, Oregon, and Vermont - now offer refundable credits of $1,000 or more per qualifying child.
Minnesota, Oregon, and Vermont passed measures to explore providing advanced CTC payments throughout the year, rather than as a single annual lump sum, to help families manage their ongoing expenses.
While most state CTCs operate independently of the federal Child Tax Credit, Oklahoma and New York have credits tied to versions of the federal CTC.
