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1 HOUSE BILL NO. 942
2 INTRODUCED BY P. ELVERUM, B. BARKER, S. DEMAROIS, B. EDWARDS, G. NIKOLAKAKOS, M. THANE
3
4 A BILL FOR AN ACT ENTITLED: “AN ACT ESTABLISHING A CHILD TAX CREDIT; PROVIDING A MAXIMUM
5 REFUNDABLE CREDIT BASED ON AGE AT THE BEGINNING OF THE TAX YEAR; PROVIDING THAT THE
6 CREDIT IS ADJUSTED FOR INFLATION; PROVIDING DEFINITIONS; AMENDING SECTION 15-30-2303,
7 MCA; AND PROVIDING AN APPLICABILITY DATE.”
8
9 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
10
11 NEW SECTION. Section 1. (1) Except as provided in subsection (3), a resident
12 taxpayer who is permitted a child tax credit under section 24 of the Internal Revenue Code, 26 U.S.C. 24, is
13 allowed a credit against the taxes imposed by this chapter for each qualifying child of the taxpayer.
14 (2) Subject to subsection (5), the amount of the credit is $1,000 for each qualifying child.
15 (3) To claim the credit, a taxpayer must have:
16 (a) proof of earned income; and
17 (b) a valid social security number for each child claimed.
18 (4) The taxpayer is entitled to a refund equal to the amount by which the credit exceeds the
19 taxpayer's tax liability or, if the taxpayer has no tax liability under this chapter, a refund equal to the amount of
20 the credit. The credit may be claimed by filing a Montana income tax return.
21 (5) The credit in subsection (2) is reduced at a rate of $100 for each $1,000 of the taxpayer's
22 federal adjusted gross income in excess of:
23 (a) $35,000 for a single or head of household taxpayer; and
24 (b) $65,000 for a married taxpayer filing jointly.
25 (6) The department shall annually adjust the credit amount in subsection (2) and the adjusted
26 gross income amounts in subsections (5)(a) and (5)(b) by the inflation factor for the following tax year and
27 round to the nearest $100.
28 (7) For the purposes of this section, the following definitions apply: ****
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1 (a) "Earned income" means earned income as defined in section 32 of the Internal Revenue Code,
2 26 U.S.C. 32.
3 (b) "Inflation factor" means a number determined for each tax year by dividing the consumer price
4 index for June of the previous tax year by the consumer price index for June 2025.
5 (c) "Qualifying child" means a child of the taxpayer who is 5 years of age or younger as of the
6 beginning of the calendar year in which the taxpayer's tax year begins.
7
8 Section 15-30-2303, MCA, is amended to read:
9 "15-30-2303. (1) The following tax credits
10 must be reviewed during the biennium commencing July 1, 2021, and during each biennium commencing 8
11 years thereafter:
12 (a) the credit for donations to innovative educational programs provided for in 15-30-2334, 15-30-
13 3110, and 15-31-158;
14 (b) the credit for donations to a student scholarship organization provided for in 15-30-2335, 15-
15 30-3111, and 15-31-159; and
16 (c) the adoption tax credit provided for in 15-30-2321; and
17 (d) the child tax credit provided for in [section 1].
18 (2) The following tax credits must be reviewed during the biennium commencing July 1, 2023, and
19 during each biennium commencing 8 years thereafter:
20 (a) the credit for infrastructure use fees provided for in 17-6-316;
21 (b) the credit for contributions to a qualified endowment provided for in 15-30-2327 through 15-30-
22 2329, 15-31-161, and 15-31-162;
23 (c) the credit for property to recycle or manufacture using recycled material provided for in Title 15,
24 chapter 32, part 6; and
25 (d) the credit for preservation of historic buildings provided for in 15-30-2342 and 15-31-151.
26 (3) The following tax credits must be reviewed during the biennium commencing July 1, 2025, and
27 during each biennium commencing 8 years thereafter:
28 (a) the residential property tax credit for the elderly provided for in 15-30-2337 through 15-30- ****
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1 2341;
2 (b) the credit for unlocking state lands provided for in 15-30-2380;
3 (c) the job growth incentive tax credit provided for in 15-30-2361 and 15-31-175; and
4 (d) the credit for trades education and training provided for in 15-30-2359 and 15-31-174.
5 (4) The following tax credits must be reviewed during the biennium commencing July 1, 2027, and
6 during each biennium commencing 8 years thereafter:
7 (a) the credit for hiring a registered apprentice or veteran apprentice provided for in 15-30-2357
8 and 15-31-173;
9 (b) the earned income tax credit provided for in 15-30-2318;
10 (c) the media production and postproduction credits provided for in 15-31-1007 and 15-31-1009;
11 and
12 (d) the credit for contractor's gross receipts provided for in 15-50-207.
13 (5) The revenue interim committee shall review the tax credits scheduled for review and make
14 recommendations in accordance with 5-11-210 at the conclusion of the full review to the legislature about
15 whether to eliminate or revise the credits. The committee shall also review any tax credit with an expiration date
16 or termination date that is not listed in this section in the biennium before the credit is scheduled to expire or
17 terminate.
18 (6) The revenue interim committee shall review the credits using the following criteria:
19 (a) whether the credit changes taxpayer decisions, including whether the credit rewards decisions
20 that may have been made regardless of the existence of the tax credit;
21 (b) to what extent the credit benefits some taxpayers at the expense of other taxpayers;
22 (c) whether the credit has out-of-state beneficiaries;
23 (d) the timing of costs and benefits of the credit and how long the credit is effective;
24 (e) any adverse impacts of the credit or its elimination and whether the benefits of continuance or
25 elimination outweigh adverse impacts; and
26 (f) the extent to which benefits of the credit affect the larger economy. (Subsection (3)(c)
27 terminates December 31, 2028--sec. 4, Ch. 391, L. 2023; subsection (3)(d) terminates December 31, 2028--
28 sec. 2, Ch. 576, L. 2023; subsection (1)(c) terminates December 31, 2031--sec. 6, Ch. 493, L. 2023.)" ****
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1
2 NEW SECTION. Section 3. [Section 1] is intended to be codified as an
3 integral part of Title 15, chapter 30, and the provisions of Title 15, chapter 30, apply to [section 1].
4
5 NEW SECTION. Section 4. [This act] applies to income tax years beginning after
6 December 31, 2025.
7 - END -