Debate Brews Over State-Level Child Tax Credit

[Excerpt from news article by Christine Stuart, CT News Junkie, 2/23/24]

Policymakers and advocates disagree on what, if anything, the Connecticut legislature should do after data from the U.S. Census showed child poverty doubled nationwide. But at least two organizations are making an argument with data to back their push for a state-level child tax credit to address the issue.

DataHaven and the United Way of Connecticut, analyzed the potential impact of a Connecticut Child Tax Credit (CT CTC) on local communities across the state. The findings of this aim to empower residents in discussions with elected officials concerning economic security, racial equity, and community well-being.

Statewide projections from the organizations indicate that 75% of households with children would benefit, translating to $306 million in refunds distributed to 268,000 eligible families.

The analysis assumes $600 per child annually, for up to three children per filing family. Single-filing families making less $100,000 per year, and joint-filers making less than $200,000 per year, would be eligible to receive the credit. The credit would be fully refundable, meaning that families without tax liability would receive the full value.

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Detailed maps illustrate the distribution of CTC refunds across the state, showcasing, for instance, that over $14 million would be allocated to 12,317 families in Waterbury and $4 million to families in Norwich. In state Senate District 1, encompassing parts of Hartford and Wethersfield, emerges as one of the legislative districts where families with children stand to receive the highest refund amounts, totaling over $11 million for 9,706 households.

Moreover, an analysis of impacts by racial/ethnic group reveals that 91% of Latino households with children and 88% of Black households with children would be eligible for the credit, along with 68% and 65% of White and Asian households with children, respectively. Eligible Latino households would receive an estimated $80 million, while eligible Black households would receive $40 million.

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There are four pieces of legislation that have been introduced to create a child tax credit this session, but they vary in the amount a family would receive. The Democratic version of the bill would phase in the tax credit from $50 to $600 over four years. The Republican versions of the bill would credit a $2,000 tax credit, per child against the income tax paid by the family.