Tax Relief on the Horizon: The Child Tax Credit to Be Boosted in One State

By Rachel Greco

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Tax Relief on the Horizon The Child Tax Credit to Be Boosted in One State

Governor Kathy Hochul’s State of the State message includes proposals aimed at addressing the high cost of living. Governor Kathy Hochul of New York proposed a significant expansion of the state’s child tax credit, potentially doubling the benefits for some families.

This initiative is one of several strategies aimed at addressing the state’s affordability crisis. This plan offers eligible families a tax credit of up to $1,000 for each child under the age of four. Families with children aged 4-16 are eligible for a tax break of up to $500 per child.

In recent years, the state has provided financial relief of up to $330 per child for the poorest families in New York. Ms. Hochul plans to include this proposal in her upcoming State of the State address and advocate for its inclusion in the executive budget.

Addressing Affordability Amid Rising Concerns

Voters are increasingly concerned about the high cost of living, particularly during the 2024 election. Many Democrats, reflecting on the unexpected Republican victories, expressed the need to prioritize addressing affordability issues.

Both Ms. Hochul and Mayor Eric Adams of New York City have announced plans for tax cuts or refunds. They are urging the legislature to adopt the following measures this year:

  • Mr. Adams’s Proposal: Aims to eliminate New York City income taxes for over 400,000 of the lowest-wage earners, providing much-needed relief.
  • Ms. Hochul’s Plan: Announced in December, she proposes to allocate approximately $3 billion to distribute checks ranging from $300 to $500 to about 8.6 million New Yorkers, utilizing funds from sales tax revenue.

Ms. Hochul pledged to improve affordability for families at a news conference on Monday. Her personal experiences raising children and understanding the financial challenges that families face have influenced her initiatives, including increasing the child tax credit.

Child Tax Credit Increase to Help Struggling Families

“I will continue doing this,” she said. “I will do it regardless of elections. It’s the correct thing to do. Her commitment to supporting families is not just a campaign promise, but a core value she intends to uphold throughout political cycles.

Ms. Hochul emphasized the importance of listening to the struggles of families, stating, “People are hurting right now, and we cannot be tone-deaf as a party, nation, or state to those cries for help.” This is how you respond to them.”

Tax Relief on the Horizon: The Child Tax Credit to Be Boosted in One State
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Investment in Child Care and Tax Credits

In recent years, the state has invested billions of dollars in improving child care and expanding family subsidies. Tax credits, like the one proposed by Ms. Hochul, have proven to be both popular and effective.

During the coronavirus pandemic, expanding the federal child tax credit led to a significant reduction in adolescent poverty. Unfortunately, this expansion expired, and bipartisan efforts to renew it failed.

Ms. Hochul’s proposal would benefit over 2.75 million children in the state, including families earning up to $200,000 per year. Ms. Hochul’s team recently announced that the average tax credit for these families will nearly double to $950 under the new plan.

Legislative leaders, who had previously proposed similar initiatives during budget discussions, appeared open and supportive of the proposal.

Assembly Speaker Carl E. Heastie’s spokesperson, Mike Whyland, expressed satisfaction with the governor’s support for tax credits, which the majority has long advocated for.

In a recent statement, State Senator Andrea Stewart-Cousins, the majority leader, expressed pride in being a mother and grandmother while serving in her position, similar to Ms. Hochul. She emphasized that funding for child care is a top priority for this legislative session.

Addressing the Rising Costs of Child Care

“I understand from personal experience how expensive raising children has become in this great state,” she told me. “We are interested in learning more about this proposal, but also recognize the need to address rising child care costs.

Providing affordable child care for all New Yorkers is crucial to alleviate the burden on families.

Interestingly, some Republicans in Albany are open to this proposal. State Senator Jacob Ashby, a Republican from Rensselaer County, emphasized the need for the state to make “structural changes to our state economy” through broader tax cuts.

However, many of his colleagues have criticized Ms. Hochul, contending that her administration has not adequately addressed the cost reduction for New York families.

“As someone who has actively sponsored bipartisan legislation aimed at providing new parents with specific relief and advocated for an increase in the child tax credit across the board, I am genuinely optimistic about this proposal,” says Mr. Ashby in a statement.

A Generous Proposal for Families

Experts from Columbia University’s Center on Poverty and Social Policy suggest that if passed, Ms. Hochul’s proposal could lead to one of the most generous child tax credits in the nation.

In 2023, New York, along with 15 other states, offered some form of this credit, with varying amounts provided to families and income thresholds at which it phased out.

Columbia researchers estimate that implementing the proposal could reduce child poverty by 9% in the coming years.

“During the pandemic, when the federal child tax credit was expanded, we witnessed a remarkable decline in child poverty, reaching historic lows,” noted Richard Buery Jr., the CEO of the Robin Hood Foundation, a nonprofit organization in New York City dedicated to combating poverty.

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Rachel Greco

Rachel Greco covers life in US County, including the communities of Grand Ledge, Delta Township, Charlotte and US Rapids. But her beat extends to local government, local school districts and community events in communities that surround Lansing. Her goal is to tell compelling stories about the area that matter to local readers.

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