By                    David Nadelle

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The Green Mountain State joined nine other states who are in taking measures to make up for the lack in federal tax benefits available to its residents’ children. The program is expected to cost $32 million and benefit over 30,000 children in Vermont.  

When President Joe Biden enacted the American Rescue Plan Act in 2021, the $1.9 trillion economic relief and stimulus package also expanded the existing Child Tax Credit (CTC). The enhanced CTC provided most working American families with $3,000 per child under 18 years of age and $3,600 per child six and younger.

As of December 31, 2021, the refundable credit had helped 36 million households with 61 million children through monthly payments of between $250 and $300. More than 90% of all American children were eligible for the expanded credit, per Columbia University’s Center on Poverty & Social Policy.

However, the credit was enhanced for 2021 only, and with President Biden’s Build Back Better program declared dead after the program failed to gain approval in Congress earlier in 2022, the Child Tax Credit has reverted to its original maximum amount of $2,000 per child, putting many back into poverty.

According to the Center on Poverty & Social Policy research, the child poverty rate rose to 17% in January 2022 from 12.1% in December 2021, its highest rate since the end of 2020.

The data shows that the 41% child poverty rate increase places 3.7 million more children in poverty due to the termination of the federal Child Tax Credit monthly payments. Latino and Black children experienced the largest percentage-point gain in poverty (7.1% and 5.9%, respectively). Columbia estimates that 10 million children are at risk of falling into or deeper into poverty.

Of the 10 states offering credits, seven have made them refundable and all 10 differ greatly in the amount of tax credit and eligibility requirements depending on a child’s age and household income.

For example, the Colorado Child Tax Credit is similar to the federal credit but it will be available for Colorado residents to claim on their 2022 state tax return when they file in 2023. Children under age six who qualified for the federal Child Tax Credit will qualify for Colorado’s child credit.

In Maine, the state government has approved an initial round of $850 stimulus checks for residents who have already filed their tax returns for 2021. Anyone in the state who files their returns later will see their checks delayed, with October 31 being the last date to file the returns.

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The 10 states currently offering state-level child tax credits are listed below, with details provided by National Conference of State Legislatures data. To figure out if your household qualifies, contact your state government or check out your state’s website.

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