New York expanded its Empire State Child Credit to children under four after temporary boosts in 2022. Connecticut permanently increased its EITC from 30.5 to 40 percent this year after enacting a temporary bump to 41.5 percent in 2022. Many states that passed temporary credit expansions during the COVID-19 pandemic came back to the table to make permanent improvements in 2023. These credits, particularly those with full refundability, will help families make ends meet while injecting more dollars into underserved communities and local economies.Įfforts to build on these credits are ongoing: Maine and Massachusetts continue to discuss enhancements to their Child Tax Credits as they hammer out their final budgets. Most of these are fully refundable, meaning the lowest income families will receive the full credit regardless of how much they owe in state income tax. Ten states have created or expanded Child Tax Credits and 12 states have enhanced Earned Income Tax Credits in 2023. As Congress continues to debate the future of the federal Child Tax Credit, states are choosing to invest – sometimes in a rare demonstration of bipartisanship – in their people by creating and expanding refundable tax credits. These policies have the potential to boost family economic security and dramatically reduce the number of children living below the poverty line, as seen during the temporary boost to the federal credits in 2021. State lawmakers continue to make groundbreaking progress on state tax credits, with 17 states creating or enhancing Child Tax Credits or Earned Income Tax Credits so far this year.
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