Connecticut Child Tax Credit Bill Advances with Bipartisan Legislative Support

A proposal to establish Connecticut’s first state child tax credit moved forward Thursday as advocates say they have gathered enough legislative support to potentially send the measure to Gov. Ned Lamont’s desk.

The Committee on Children approved a bill that would create a $600-per-child credit, capping benefits at $1,800 per household for the current tax year, according to committee proceedings. Eligible families could claim the relief with state returns filed in early 2027.

The committee’s action represents the latest development in what advocates describe as a six-year campaign to establish the credit. This push for tax relief comes as Connecticut child care advocates have also sought $70M in emergency funding amid a broader provider crisis, highlighting the multifaceted financial pressures facing families across the state. Sen. Ceci Maher, D-Wilton, co-chairwoman of the children’s committee, said the proposal builds on proven success during the pandemic.

“We saw how it lifted families out of poverty during COVID,” Maher said. “It’s been proven: It’s a mechanism for helping families.”

The bill mirrors similar measures that have attracted significant Democratic support in both legislative chambers. Twenty-three of the 25 majority Democrats in the 36-member Senate back a nearly identical proposal, according to legislative records. A third version pending before the Finance, Revenue and Bonding Committee has drawn support from 76 Democratic representatives in the 151-member House.

The legislative momentum comes as Connecticut families face mounting financial pressures. An estimated 604,000 Connecticut children lived in households that received enhanced federal child tax credits in 2021, when Congress temporarily expanded the benefit from $2,000 to $3,000 per child, and in some cases $3,600, according to federal data.

The Center on Budget and Policy Priorities, a Washington, D.C.-based policy group, found that about 80,000 Connecticut children lived in homes that fell below the poverty line or deeper into poverty after the enhanced federal credit expired.

Connecticut families lost additional support this January when federal tax credits helping them purchase health insurance on the state exchange expired. Lamont and the General Assembly used an estimated $117 million from state reserves to offset a portion of that loss, according to state budget documents.

Lisa Tepper Bates, president and CEO of the United Way of Connecticut, said rising costs make the credit increasingly necessary.

“Families will tell you that many expenses of raising a child are non-negotiable — car seats, new shoes, child care, doctors’ visits to keep kids healthy,” Bates said. “Those costs are going up as prices continues to rise and key federal benefits are cut.”

Connecticut lags behind neighboring states in providing this type of relief. All surrounding states except Rhode Island offer state income tax-based credits to offset child-rearing costs, according to policy advocates. Rhode Island Gov. Dan McKee proposed his state’s first child tax credit earlier this winter.

The United Way of Connecticut, which leads the advocacy campaign, uses its ALICE methodology to demonstrate Connecticut families’ financial struggles. The acronym stands for Asset-Limited, Income-Constrained and Employed, offering what the organization presents as an alternative to federal poverty measurements.

The United Way estimates a Connecticut family of four needed $116,000 to cover basic survival needs including food, housing, utilities, child care, health care and transportation in 2023. About 40% of Connecticut households fail to meet that survival budget, according to the organization’s analysis.

This contrasts sharply with the Federal Poverty Level, developed in the mid-1960s and based largely on minimum food diet costs. Under federal guidelines, a family of four earning more than $30,000 was considered above the poverty line in 2023.

Despite the legislative support, the proposal faces a crucial test when Democratic legislative leaders negotiate the final state budget with Lamont in late April and early May. The governor’s preferred tax relief measures do not currently include a child-based credit, according to legislative sources.

The timing means families wouldn’t see immediate relief, but supporters hope the combination of legislative backing and growing awareness of Connecticut’s high living costs will finally bring their long-sought victory.