An Act Establishing A Refundable Child Tax Credit.
By implementing this refundable tax credit, SB00740 will significantly impact state tax laws related to personal income tax. It offers a structured financial benefit that directly correlates with the number of dependent children in a household. The legislation aims to benefit families with lower to middle incomes, as the measure includes phased reductions based on federal adjusted gross income thresholds. Consequently, it can help improve the financial stability of families, thus leading to enhanced economic security and potential boosts in local economies as families have more disposable income to spend.
SB00740 proposes the establishment of a refundable child tax credit aimed at providing financial support to families in Connecticut. This legislation intends to alleviate the tax burden on families, specifically targeting households with children. The bill sets the framework for a $150 credit per child for the taxable year commencing January 1, 2025, which will progressively increase to $600 per child over the subsequent three taxable years. This phased approach allows for families to receive greater financial relief as they file their taxes in future years.
However, the bill may face contention in terms of its fiscal implications on the state's budget. Critics may argue that establishing a new refundable tax credit could lead to increased pressures on the state's financial resources, especially if there are broader economic downturns or budgetary constraints in the future. Furthermore, discussion may arise regarding the fairness of income thresholds, with some stakeholders pushing for higher or lower limits based on varying cost-of-living considerations across different regions of the state. The balance of providing necessary support to families while ensuring sustainable state finances will likely be a significant point of debate.