Relating To A Child Tax Credit.
The proposed legislation modifies Chapter 235 of the Hawaii Revised Statutes by providing a structure for the child tax credit, thereby reducing the state income tax liability for qualified individuals. Taxpayers can use excess credits in subsequent tax years until fully utilized, promoting continued fiscal support for families with children. The report submitted annually to the legislature will track the number and total value of credits, aiding in transparency and evaluation of the program's effectiveness in combating child poverty.
House Bill 233 aims to establish a nonrefundable child tax credit for working families in Hawaii, addressing child poverty by allowing eligible taxpayers with an adjusted gross income of $60,000 or less to claim the credit. The bill comes in response to the expiration of increased federal child tax credits from the American Rescue Plan Act of 2021, which significantly benefited families, enabling them to meet their basic needs. In establishing a state-specific credit, Hawaii joins other jurisdictions that have implemented similar measures, ensuring support for their communities at the state level.
Overall, the sentiment surrounding HB233 has been positive among supporters, who advocate for increased support for working families and children, especially following the reduction of federal credit benefits. The recognition of child poverty issues and the push towards state solutions reflect a proactive legislative approach. However, there remains some skepticism about the adequacy and effectiveness of the proposed nonrefundable nature of the credit, with concerns that it might not provide sufficient assistance compared to refundable credits offered at the federal level.
A notable point of contention revolves around the nature of the credit being nonrefundable, which limits benefits to only those with tax liabilities, thereby excluding low-income families who may not owe taxes. This could mean that the most disadvantaged families—those that need help the most—may not benefit from the credit at all. Critics suggest that without a refundable component, the bill may fail to meaningfully address child poverty, sparking discussion about the scope of tax credits needed for real economic relief.