The federal Child Tax Credit (CTC) is a federal program for parents with low and moderate earnings. For a child to be eligible, the parent must answer certain qualifying questions regarding the child’s age, relationship to the parent, support, dependency, citizenship, and residence. Because the CTC serves middle-income and most upper-middle income families, in addition to low- and moderate-income families, more families are able to receive this tax credit than families under the Earned Income Tax Credit (EITC). The CTC helps to pay for the cost of raising children. Research suggests that families receiving a larger refundable tax credit have children who do better in school, have a higher chance of going to a university, and will likely earn more as adults. Some states have also implemented a child tax credit to complement the federal CTC.
This indicator documents which states have a state child tax credit. Details on states’ child tax credits, including their amounts and their eligibility requirements are available in the source document. For the State of Babies Yearbook: 2023, we updated the source document in order to report more recently enacted state tax credits. We recoded North Carolina to “yes” to align with previous years of the Yearbook. Tax Credits for Workers and Their Families (2018). State Tax Credits. Tax Credits for Workers and Their Families. http://www.taxcreditsforworkersandfamilies.org/state-tax-credits/
Marr, C., Huang, C. C., Sherman, A., & Debot, B. (2015). EITC and Child Tax Credit promote work, reduce poverty, and support children’s development, research finds. Center on Budget and Policy Priorities. https://www.cbpp.org/research/federal-tax/eitc-and-child-tax-credit-promote-work-reduce-poverty-and-support-childrens
Source:
National Conference of State Legislatures (2022). Brief child tax credit overview. https://www.ncsl.org/human-services/child-tax-credit-overview