What makes a child tax credit progressive?

AuthorThomhave, Kalena

States can design child tax credits in myriad ways. Some of these decisions may be motivated by politics or funding concerns. But what makes a credit truly progressive? Largely, whether it will benefit the people who need it most.


If a tax credit is refundable, it means that you're refunded, in cash, the amount of credit left over after you no longer owe any taxes. Low-income people often do not owe any federal income taxes, so if a credit is not refundable, it leaves out the poor. In Vermont, if a parent or guardian with a child under the age of six doesn't owe any taxes, they'll receive the full $1,000 credit as a tax refund.


Take the federal expanded CTC--it lasted only one year, with Democrats likely believing such a popular policy would simply have to be reinstated. That's not what happened. A permanent policy means that a child tax credit is not set to end or sunset sometime in the near future. For example, Connecticut's $250 child tax rebate reaches most children in the state, but it is a one-time rebate, with no renewal scheduled.


A universal child tax credit is available to every child, no matter a parent...

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