An Act Establishing A Refundable Child Tax Credit.
This legislation is intended to provide financial relief to families, particularly those with children, by reducing their overall tax burden. The phased increase in the credit is designed to gradually enhance support for families as they navigate the tax implications of raising children. The bill sets recommended income thresholds at $100,000 for unmarried individuals and $200,000 for married couples, establishing a tiered structure that targets assistance toward middle and lower-income families while reducing benefits for those with higher incomes.
Senate Bill 36 aims to establish a refundable child tax credit against the personal income tax for taxpayers with dependent children. Initially, it proposes a credit of $50 per child for the taxable year commencing January 1, 2024, which is set to phase up to $600 per child over the following four years. The bill also includes a reduction clause wherein the credit amount decreases by 10% for every $1,000 or fraction thereof of federal adjusted gross income that exceeds specified thresholds, which vary based on filing status and the number of children.
While the introduction of a child tax credit is broadly seen as a positive step towards supporting families, debates surrounding this bill may arise regarding its fiscal implications on state revenue. Critics could argue that the phased approach may not sufficiently address immediate financial needs and that the income thresholds might exclude some middle-income families struggling financially. Additionally, discussions could focus on the sustainability of such tax credits in the context of state budgeting and priorities, particularly if there are competing demands for public funding in other areas such as education and healthcare.