Income tax; provide a credit for taxpayers who claim a federal child income tax credit.
Impact
The bill is set to affect families who are already claiming the federal child income tax credit by offering them additional relief at the state level. By enabling a tax credit that corresponds with the federal program, HB108 effectively aligns state tax policy with federal tax incentives, making it easier for taxpayers to understand and navigate their tax responsibilities. This act is particularly relevant to low- and middle-income families who depend on such credits to manage their state tax liabilities.
Summary
House Bill 108 proposes a state income tax credit for taxpayers who claim the federal child income tax credit under 26 USCS Section 24. The legislation allows eligible taxpayers to receive a credit of $200 per qualifying child, up to a maximum credit of $1,000 per tax year. This measure aims to provide additional financial support for families while they benefit from the federal tax credit. The intent behind the bill is to enhance the financial resources available to families, thereby assisting them with child-related expenses during tax seasons.
Contention
While the bill is likely to be welcomed by family advocacy groups and many taxpayers as a beneficial policy change, it may face scrutiny related to its fiscal implications for state revenue. Critics may argue that providing tax credits could impact the state budget, leading to potential debates around funding for public services. Additionally, some legislators might question the sustainability of such credits if a significant number of taxpayers utilize them, raising concerns about the long-term fiscal health of the state’s tax systems.