Raising a family is expensive, and with the rising cost of living, many low- and middle-income families struggle to make ends meet. While the federal Child Tax Credit (CTC) provides much-needed relief, some states are taking additional steps to support their residents. Ohio is now considering its own state-level Child Tax Credit to further assist families with children. If approved, this initiative could provide significant financial relief while also boosting the state’s economy.
Child Tax Credit
The Child Tax Credit is a financial benefit designed to help families offset the costs of raising children. This tax break exists at both federal and state levels, though not all states offer their own version.
At the federal level, the Child Tax Credit allows eligible families to claim up to $2,000 per child. A portion of this credit, up to $1,700, is refundable if the family also qualifies for the Additional Child Tax Credit. This means that even if a family does not owe taxes, they may still receive money back.
Who Qualifies?
The IRS has set specific criteria for families to qualify for the federal Child Tax Credit. A child must:
- Be under 17 years old by the end of the tax year.
- Be a direct relative (child, stepchild, sibling, grandchild, etc.).
- Live with the taxpayer for more than half the tax year.
- Be financially dependent on the taxpayer.
- Be a U.S. citizen, national, or resident alien.
- Have a valid Social Security Number.
These criteria ensure that the tax credit supports families who are actively raising and providing for their children.
Ohio’s Proposed Child Tax Credit
Ohio is now considering implementing its own Child Tax Credit to further support families. If passed, eligible families would receive an additional $1,000 per child. This state-level credit would be in addition to the federal benefit, providing a much-needed financial cushion for families struggling with rising expenses.
The proposal, introduced as part of Ohio Gov. Mike DeWine’s biennial budget, aims to make a lasting impact. Supporters argue that this initiative will not only help families but also benefit the broader economy by injecting nearly three-quarters of a billion dollars into local businesses and services.
Why State-Level Tax Credits Matter
While the federal Child Tax Credit helps millions of families, state-level programs offer additional support tailored to local economic conditions. Currently, 16 states have their own Child Tax Credit programs, and if Ohio’s proposal is approved, it will become the 17th.
Research has shown that financial support for families leads to better long-term outcomes for children, including improved education, health, and economic stability. According to Rob Moore of Scioto Analysis, investing in early childhood support programs benefits not just families but the entire community.
Potential Impact
If Ohio implements this tax credit, it could have several positive effects:
- Financial relief – Families will have extra funds to cover essential expenses like childcare, groceries, and housing.
- Economic growth – Additional household spending could boost local businesses and create jobs.
- Reduced child poverty – Similar programs in other states have helped lower childhood poverty rates, providing children with a better start in life.
As living costs continue to rise, additional tax credits like this one could be crucial in ensuring that families can provide a stable and supportive environment for their children.
If Ohio moves forward with its proposal, thousands of families across the state could see a direct improvement in their financial well-being. With tax season in full swing, residents will be closely watching to see if this plan becomes a reality.
FAQs
Who qualifies for the federal Child Tax Credit?
Families with children under 17 who meet IRS dependency rules.
How much is Ohio’s proposed Child Tax Credit?
Ohio is proposing a $1,000 credit per child for eligible families.
Is the federal Child Tax Credit refundable?
Yes, up to $1,700 is refundable if you qualify for the Additional CTC.
Which states have their own Child Tax Credit?
Currently, 16 states offer a state-level Child Tax Credit program.
When will Ohio’s Child Tax Credit be approved?
The proposal is part of the state budget and is still under review.
