State Democratic leaders including House Majority Leader Matt Ritter and Senate President Martin M. Looney introduced in late February a proposal to create a child tax credit in Connecticut.
This tax credit would provide $600 per child for up to three children per family, benefitting hundreds of thousands of families and approximately 550,000 children statewide. As many as 70 members of the House have sponsored one of two bills seeking to enact the tax credit.
“Ensuring Connecticut’s families have the financial support they need is a moral and economic imperative,” Looney said. “Senate Bill 740 takes a crucial step forward by supplementing the state Earned Income Tax Credit (EITC) and making life more affordable for families with children. I am proud to sponsor this proposal once again in 2025 and to fight for a Connecticut where every child has the chance to thrive.”
The credit would have income limits of $100,000 for a single filer or $200,000 for dual filers. That would allow three-quarters of all families in Connecticut to qualify, including 88% of Black households, 91% of Latino households and 65% of Asian households.
The tax credit would provide support to 87% of single-parent households led by women and 79% of single-parent households led by men, with three-quarters of households raising relatives or foster children as dependents would also apply.
If passed by the legislature and signed into law by the governor, the tax credit would be fully refundable, so families not owing income tax would still receive and likely spend the additional funds, contributing to the state’s economy.
According to a 2020 report from Connecticut Voices for Children, found that for every $1 in child tax credits, a family spends $1.38 in the local economy. The policy is popular across the state – a recent poll found 73%, nearly three-quarters, of voters approve of it, even those who do not have children.
“A refundable child tax credit is designed to provide direct tax relief to families in our state,” Ritter said. “These proposals would provide added financial support and hopefully some economic relief for working families.”
Legislators said the tax credit policy was intended to meet the rising costs of raising a child in the United States and in Connecticut, where nearly 40% of families struggle to make ends meet. It builds on the General Assembly’s 2022 one-time Child Tax Rebate, which provided hundreds of dollars to families throughout the state.
Advocates for the policy also noted that Connecticut is the only state that taxes personal income without making adjustments for the size of a family; this tax credit is designed to accommodate that taxation policy.
According to the Urban Institute, a permanent expanded child tax credit program, such as the temporary federal expansion in 2021, would lead to higher earnings on average for all races, genders and sexes, also improving overall student performance and economic mobility for individuals.
