Cost of living is consistently a concern for residents across the nation, but it looms particularly large for families. Low- and middle-income families are often the most vulnerable to price increases, and covering monthly expenses can be a challenge with multiple children when you do not earn a large gross annual income. One state is looking to introduce a state Child Tax Credit (CTC) for low- and middle-income families to assist with today’s cost of living challenges.
The Child Tax Credit for all states
Child Tax Credits exist at both a state and federal level. The federal Child Tax Credit is one of the most well established and utilized tax rebate programs in the country. With tax season currently in full swing, millions of families are expected to apply for the federal tax credit. For the 2023 fiscal tax year, 69 million taxpayers claimed the Child Tax Credit. In addition to this, the federal government also offers the Additional Child Tax Credit for citizens who qualify for the Child Tax Credit.
The Child Tax Credit eligibility criteria
If you qualify for the federal Child Tax Credit, you can claim up to $2,000 per dependent child. This is the last year you can claim this amount, as the original Child Tax Credit rebate amounted to $1,000 per dependent child, however, this amount was doubled due to the COVID-19 pandemic. Up to $1,700 of this credit is refundable if you also claim and qualify for the Additional Child Tax Credit.
According to the IRS website, your child must meet the following criteria to receive the Child Tax Credit:
- Be under 17 at the end of the tax year.
- Be your son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of one of these (for example, a grandchild, niece or nephew).
- Not provide more than half of his or her own support for the tax year.
- Have lived with you for more than half the tax year.
- Be claimed as a dependent on your return.
- Not file a joint return for the year (or filed the joint return only to claim a refund of taxes withheld or estimated taxes).
- Be a U.S. citizen, U.S. National or a U.S. resident alien.
- Must have a Social Security Number that is valid for employment and is issued before the due date of your tax return (including extensions).
Ohio proposes a new Child Tax Credit
If you live in Ohio and qualify for the federal Child Tax Credit, you are in luck: the Ohio state government has proposed its own Child Tax Credit program, which you can also apply for if it is passed. Ohio Gov. Mike DeWine has announced in the biennial budget proposal that he wants to introduce a Child Tax Credit program which would provide families with $1,000 per dependent child.
Not only would this significantly help qualifying families in Ohio, but it would be good news for the local economy. If the program is approved, it would add nearly three quarters of a billion dollars to the economy.
“There is a robust body of research that shows how investments made in early childhood are beneficial both to the families who receive them and the broader community,” Rob Moore, a principal with Scioto Analysis, said in a statement. “Children who grow up with access to more resources have an easier time in the short term, which often translates to better wage, health, and criminal justice system involvement outcomes later in life.”
Ohio may join these 16 states
If the bill is approved, Ohio would join 16 other states that offer their own Child Tax Credit programs. These state initiatives ensure that families can stay afloat and cover living expenses associated with raising a family. These programs have been shown to lower childhood poverty, and set children from low-income backgrounds up for increased success.
