Income Tax – Child Tax Credit – Alterations and Sunset Extension
Impact
If enacted, HB 919 will significantly impact state income tax laws by ensuring that more families can claim a tax credit of $500 per qualified child. This is an important change intended to provide additional financial support to families, helping to alleviate economic pressures on low-income households. The alterations are designed to be applicable for tax years starting after December 31, 2021, and they introduce a sunset provision, setting the expiration date for the bill's provisions at June 30, 2027, unless further legislative action is taken.
Summary
House Bill 919, known as the Income Tax – Child Tax Credit – Alterations and Sunset Extension, aims to enhance and extend the child tax credit available to qualifying Maryland residents. This bill modifies the definition of a 'qualified child' for tax purposes, expanding eligibility criteria by including dependent children under the age of 17 who are also children with disabilities. Moreover, it raises the income threshold for taxpayers claiming the credit from $6,000 to $15,000, thereby allowing a broader demographic of low-income families to benefit from this tax relief.
Contention
While advocates for HB 919 argue that it is a crucial step in providing financial assistance to families in need, some critics express concern about the long-term fiscal implications of extending such tax credits. There is a dialogue around whether increasing the income eligibility and broadening definitions might place additional strain on state finances, especially if the tax credits result in substantial loss of revenue. Additionally, the sunset provision has raised questions about the future of financial aid for families with children once the bill expires.
Additional_notes
Overall, HB 919 positions itself as a progressive tax relief measure aimed at supporting families in Maryland, specifically targeting those with dependent children and potential disabilities, thus encouraging a family-friendly tax policy within the state.