States Offering Their Own Child Tax Credit: Minnesota Debuts Big Early Payouts in 2025
With just one day left until 2025, you may be thinking hard about how to address your tax issues in the new year. If these plans involve claims federal child tax credityou should also be aware that your state may offer its own version of the credit to help you get more help, especially if you live in Minnesota.
Whether at the state or federal level, the child tax credit can provide parents with a financial lifeline, helping them put money into their pockets every year for every child. While temporarily expanding the federal child tax credit Expected to expire in 2026 (PDF) Unless Congress acts to extend the deadline, parents in a handful of states may also be eligible for additional state credits, although the amounts offered and eligibility requirements vary widely.
The impact of the child tax credit has been considerable even in past years, and a study of the 2021 temporary expansion of the federal credit found it was a significant factor in reducing child poverty. Columbia University Center on Poverty and Social Policy Discover Payments lowers monthly fees Child poverty has been reduced by nearly 30%, and subsidies have benefited approximately 61 million children.
Read on to find out if your state offers a child tax credit and if your family may qualify for it. For more information about taxes, learn how to IRS May Be Processing Payment Apps and how New income tax brackets may affect you.
What is the child tax credit?
Through the child tax credit, eligible taxpayers can reduce their income tax based on the number of children they claim as dependents.
The federal credit, first introduced in 1997, currently provides $2,000 per child, of which only $1,600 is refundable, meaning you can receive the amount even if you don’t owe that much in taxes. The remaining $400 is non-refundable and therefore can only be used to reduce your tax liability.
The current value of the federal credit is determined by the American Rescue Plan Act of 2021, which temporarily extended the credit through December 31, 2025. Amount before: $1,000 per dependent child under 16, non-refundable.
Which states offer the child tax credit?
Regardless of what happens with the federal child tax credit in 2026, parents in the following 16 states can rest assured knowing they may also receive a state-level tax credit: Arizona, California, Colorado, Idaho, Illinois States, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Oklahoma, Oregon, Utah and Vermont.
However, the specifics of these credits — including their value, refundable amount and what counts as a dependent child — will vary by state.
What are Minnesota’s child tax credit advance payment options?
Minnesota Governor Tim Walz on Tuesday New child tax credit option launched Taxpayers in the North Star State can use a payment method called an “advance payment.” If Minnesota residents who are eligible for the state credit apply for this new option during the 2025 tax season, they will not only receive the full credit for that year (in the amounts below) as normal, but they will also receive the full credit for that year. Get the credit they will receive in 2026. Under the new policy, advances to next year’s child tax credit will be paid in increments in the second half of 2025.
“The goal of this nation-leading tax credit is to reduce child poverty and provide tax relief to working-class Minnesota families,” said Walz. “With the prepayment option, we are making it easier for families to manage their annual Family Budgeting. This new option will increase financial freedom and ensure families have the support they need throughout the year.”
How much is the child tax credit in each state and who qualifies?
According to the Department of Revenue, the following 16 states offer child tax credits as of October 2024 national conference of state legislatures. Eligibility and amounts vary by state, with 12 states allowing tax refunds, so you can get a refund even if you don’t owe taxes.
Arizona: $100 per dependent child under 17 years of age, non-refundable.
california: $1,117 per qualifying dependent child under age 6, refundable. The full income must be less than $25,000, with a reduced amount available for households earning between $25,000 and $30,931. Must also qualify for the state’s earned income tax credit.
colorado: Refundable up to $3,200 per qualifying dependent under 16 years of age. Exact amount will vary Based on income, filing status and age of child.
idaho: $205 per dependent child under 17 years of age, non-refundable.
Illinois: A refundable credit equal to 20% of the state income tax credit for each dependent child under 12 years of age.
maine: $300 per dependent child under 17 years old, refundable.
Maryland: $500 refundable per qualifying dependent child under 17 years of age. However, the child must have a disability and the family’s adjusted gross income must be $6,000 or less to qualify.
Massachusetts: $180 for one dependent child under 12, $360 for two or more, refundable. Credits also apply to adults 65 years of age or older or anyone with a disability.
minnesota: $1,750 per dependent child, refundable, for individual filers earning $29,500 or less, or $35,000 for joint filers.
New Jersey: For taxpayers making less than $30,000 a year, $500 is refundable for each dependent child under age 6. Credit Decrease in $100 increments As income brackets increase, those earning between $120,000 and $150,000 can receive a minimum credit of $100 per dependent.
New Mexico: Refundable between $75 and $175 per dependent child under 17, depending on income level.
New York: The tax credit is a taxpayer’s higher of: 33% of the portion of the federal child tax credit and the federal additional child tax credit attributable to qualified children, or $100 multiplied by the number of qualified children. Points are refundable, children must be 16 or under.
Oklahoma: 5% federal child tax credit per household, non-refundable. Does not apply to married couples filing jointly with gross income in excess of $100,000.
oregon: $1,000 per dependent child under 5 years old, refundable. Available only to households earning less than $30,000 per year.
Utah: $1,000 per dependent child ages 1 to 3, non-refundable. The credit is reduced by $10 for every dollar of income above certain thresholds: $27,000 for married filers filing alone, $43,000 for single filers, and $54,000 for joint filers.
Vermont: $1,000 per dependent child under age 5, refundable for taxpayers making less than $125,000 per year.
For more, check out CNET’s picks The Best Tax Software You Can Get in 2024.
2024-12-31 22:00:00