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

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

Governor Kathy Hochul is taking bold steps to address the pressing issue of high living costs by revealing key proposals from her State of the State address.

Governor Kathy Hochul of New York recently proposed a significant expansion to the state’s child tax credit, potentially more than doubling the benefits that some families currently receive.

This initiative is one of several strategies aimed at addressing the state’s affordability crisis. This plan allows eligible families to receive a tax credit of up to $1,000 for each child under the age of four.

In addition, families with children aged 4 to 16 would be eligible for a $500 tax break per child.

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

Addressing Affordability Amid Rising Concerns

The high cost of living has become a major concern for voters, particularly during the 2024 elections. Many Democrats, reflecting on the unexpected Republican victories, expressed the need to prioritize addressing affordability issues.

Both Ms. Hochul and New York City Mayor Eric Adams have announced plans to reduce or refund taxes. 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 stated at a news conference on Monday that she remains committed to improving family affordability. She emphasized that initiatives like increasing the child tax credit are influenced by her own experiences raising children and understanding the financial challenges that families face.

Tax Relief on the Horizon: The Child Tax Credit to Be Boosted in One State
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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 more than just a campaign promise; it is a core value that she intends to uphold regardless of political cycles.

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

Investment in Child Care and Tax Credits

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

Notably, during the early stages of the coronavirus pandemic, increasing the federal child tax credit significantly reduced adolescent poverty. Unfortunately, this expansion expired, and bipartisan efforts to renew it failed.

Ms. Hochul’s proposal is expected to affect over 2.75 million children in the state, expanding eligibility to families earning up to $200,000 per year.

According to a recent news release from Ms. Hochul’s team, the average tax credit for these families is expected to double, reaching nearly $950 under the new plan.

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

“We are very glad the governor is supporting these important tax credits, which we have long championed in the Assembly majority,” said Mike Whyland, spokesman for Assembly Speaker Carl E. Heastie.

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 remains 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. “While we are eager to delve deeper into this proposal, we are also acutely aware of the need to address the rising cost of child care.”

It is a significant burden that can overwhelm families, so we must take action to make affordable child care available to all New Yorkers.”

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, claiming that her administration has not done enough to reduce costs 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

Ms. Hochul’s proposal, if passed, could become one of the most generous child tax credits in the country, according to experts at Columbia University’s Center on Poverty and Social Policy.

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

These Columbia researchers estimate that once fully implemented, the proposal could reduce child poverty by about 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 New York City-based nonprofit organization dedicated to poverty reduction.

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