$1,000 Child Tax Credit Boost for Parents: New Bill May Pass Soon in This State!

The cost of living continues to be a pressing issue for people nationwide, hitting families especially hard. Those in the low- and middle-income brackets, who often have several dependents, struggle the most with rising prices. To address these economic pressures, one state is considering the introduction of a state Child Tax Credit (CTC) aimed specifically at assisting these families.

Exploring the Child Tax Credit Nationally

Child Tax Credits are available both at the state and federal levels. The federal Child Tax Credit is a well-known and widely claimed tax benefit. As tax season is underway, it is anticipated that millions will claim this credit. For the fiscal year 2023, the Child Tax Credit was claimed by 69 million taxpayers. Furthermore, the federal government also provides an Additional Child Tax Credit for those who qualify.

Qualifying for the Child Tax Credit

Eligibility for the federal Child Tax Credit allows taxpayers to claim up to $2,000 for each dependent child. This will be the last year to claim such an amount, as it was increased from $1,000 per child during the COVID-19 pandemic. If eligible for the Additional Child Tax Credit as well, up to $1,700 of this can be refundable.

The IRS outlines specific requirements to qualify for the Child Tax Credit:

• The child must be under 17 at the end of the tax year.
• They must be a biological, step, or foster child, or a sibling or stepsibling, or a descendant of any of these (e.g., a grandchild, niece, or nephew).
• The child cannot provide more than half of their own financial support during the tax year.
• They should have lived with you for more than half of the tax year.
• They must be claimed as a dependent on your tax return.
• The child must not file a joint return for that year unless it is only to claim a refund.
• They must be a U.S. citizen, U.S. National, or a U.S. resident alien.
• The child must have a Social Security Number valid for employment that was issued before the tax return’s due date (including extensions).

Ohio’s Initiative for a State-Level Child Tax Credit

Residents of Ohio who qualify for the federal Child Tax Credit may have additional good news as the Ohio state government is proposing its own Child Tax Credit program. If enacted, this would allow eligible families to claim $1,000 per dependent child as proposed by Ohio Governor Mike DeWine in the state’s biennial budget.

This proposed tax credit could also boost Ohio’s economy significantly. If passed, it’s projected to inject nearly three-quarters of a billion dollars into the local economy.

“There’s substantial research indicating that early childhood investments yield benefits not only to the receiving families but also to the community at large,” said Rob Moore, a principal with Scioto Analysis. “Children with access to more resources tend to face fewer challenges in the short term, which often leads to better income, health, and legal outcomes later in their lives.”

Ohio Could Join Other States with Similar Programs

If this bill passes, Ohio will join 16 other states that have their independent Child Tax Credit initiatives. These programs are critical in helping families manage the costs associated with raising children, reducing child poverty, and setting the stage for greater success among children from lower-income families.