According to the Institute on Taxation and Economic Policy, the temporary 2021 federal child tax credit expansion dramatically reduced child poverty.
Now some states, including New York, want to build on that success.
According to Dede Hill, director of policy at the Schuyler Center for Analysis & Advocacy, the benefits of these tax credits are in their simplicity.
“What a child tax credit does, is it transfers cash into the hands of families – into the hands of parents,” Hill explained on Capital Tonight. “These are parents who are working, they are filing taxes and often these are low-income working families.”
In New York state, the tax credit is fully refundable, which means that if the credit is larger than a family’s tax refund, that family can keep the entire credit.
“What we know is that families use these credits to provide for the daily necessities of their children. They use them to buy diapers. They used them to fix their cars so that they can continue to go to work. They use them to get piano lessons for their children,” said Hill. “These are incredibly simple but effective tools to enable parents to be the best parents they can be.”
The Working Families Tax Credit bill, sponsored by state Sen. Andrew Gounardes and Assemblymember Andrew Hevesi, would provide families with a $500 dollar credit per child regardless of income, and up to $1,500 per child for single parents making under $25,000 a year, or $50,000 for two-parent households.
The Gounardes-Hevesi legislation would also expand the credit in multiple ways: to children under 3 and to all New Yorkers regardless of citizenship status.
The cost would be $4 billion.
“In short, the Working Families Tax Credit is an incredible, bold and ambitious proposal,” Hill said of the bill.
The state budget was due on April 1. The Legislature is expected to return on Monday to pass a second extender bill.