New Minnesota Child Tax Credit Available

White Earth Investment Initiative Lead Community Services Coordinator Sue Trnka is excited about the new child tax credit available to Minnesota residents when they file their 2023 Minnesota tax returns.

The permanent Minnesota child tax credit will go beyond federal child tax credits to provide up to $1750 per qualifying child to Minnesota residents with an annual income of  $29,500 ($35,000 for Married Filing Jointly) or below. There is no limit to the number of children who can be claimed, although they must be under 17 years of age. The full value of the tax credit is reduced for residents earning over the income threshold.

Even residents who do not owe tax or do not have earned income can receive the credit. Trnka notes that the lack of an income requirement for the credit is significant because it means, for example, that grandparents living on Social Security who are raising grandchildren as dependents can file a tax return to get the credit.

Leaders in Minnesota’s government are implementing this credit with the hope of reducing childhood poverty in Minnesota by one-third. The program and its expected outcomes are based on research done on similar federal tax credits offered during the COVID-19 pandemic. Leaders estimate that “nearly 300,000 households including 513,000 children” will be impacted by the Minnesota credit. The approximately $900 million for the credit in Minnesota’s next two-year budget was part of the 2023 omnibus tax bill Governor Walz signed into law.

Trnka stated, “We know from surveys at our VITA Tax Site that the majority of our families receiving tax refunds are using that money to pay monthly bills. This tax credit is going to help families more easily meet monthly expenses throughout the year and lift families and children out of poverty.”

The credit will come as a one-time payment in 2024 for those that file for it, but there is potential for the credit to be split into installments in future years.

People with questions should visit the Minnesota Department of Revenue Child Tax Credit webpage or read the One Minnesota Budget: Minnesota Child Tax Credit summary for more information. Minnesota residents can call 1-800-752-6579 beginning January 22, 2024 to set up a tax appointment with White Earth Investment Initiative (WEII).  Please visit the WEII Tax Services webpage for information about eligibility, guidelines, and restrictions for WEII’s free tax preparation services.