AN ACT relating to the Kentucky child credit.
If enacted, SB47 will significantly alter tax policy in Kentucky by establishing a new refundable credit specifically for young children. This bill will amend existing laws and add a new section to KRS Chapter 141, potentially leading to changes in taxpayer obligations and state revenue. The data collected on the utilization of this credit may influence future tax policy decisions, especially regarding how such credits could be adjusted to maximize their effectiveness in aiding families.
SB47, titled 'AN ACT relating to the Kentucky child credit,' aims to introduce a refundable child credit applicable to eligible taxpayers beginning with taxable years from 2026 to 2030. It allows individuals to claim a credit of up to $1,000 per qualifying child, targeting those with modified gross incomes below specified thresholds (less than $50,000 for single taxpayers and less than $100,000 for married couples). This initiative is intended to support families by providing them with financial relief, particularly aimed at younger children, as it only covers children under six years old.
The sentiment surrounding SB47 appears to be mostly positive among proponents, who view it as a necessary step towards enhancing financial assistance to families with young children. This sentiment emphasizes the importance of supporting families and the economic benefits that come from reducing child poverty. However, there might be opposition from those concerned about the financial implications of the new credit on the state budget, leading to a cautious evaluation of its long-term sustainability.
A potential point of contention is the financial thresholds set for credit eligibility. Critics may argue that the income caps could exclude families who are just above these thresholds, thereby limiting the support for middle-class families who might still struggle with child-rearing costs. Additionally, there will likely be discussions on the potential impact of this credit on existing tax credits, as clear prioritization rules must be established to manage the allocation of multiple credits effectively.