Expanding the Child Tax Credit Income Phaseout Levels

In 2023, Minnesota passed a Child Tax Credit (CTC) bill, creating tax relief for families raising children and contributing to the growth of the state. Families face raising costs with high rates of inflation in recent years; the state of Minnesota should incentivize tax policy which supports parents putting in the work of raising Minnesota’s next generation.

HF2339/SF2508  increase the income threshold phaseout levels for receiving the CTC in the following ways:

• Raising the phaseout level from $35,000 to $45,490 for a married taxpayer filing a joint return, or
• Raising the phaseout level from $29,500 to $38,340 for all other filers

HF2254/SF2548 creates a $400 income tax credit for qualifying family when a child has been born within the taxable year. Given the budget deficit the state is facing, the proposed change in policy has been shrunk to $100 for qualifying families. The current House Tax omnibus proposal includes this provision and is in negotiation.

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