Bill > HB942

This bill establishes a new child tax credit for Montana residents with children 5 years old or younger, providing a $1,000 credit per qualifying child. To claim the credit, taxpayers must have proof of earned income and a valid social security number for each child. The credit is fully refundable, meaning taxpayers can receive the full amount even if they owe no taxes. The credit amount begins to phase down for taxpayers with higher incomes, reducing by $100 for every $1,000 of federal adjusted gross income above $35,000 for single or head of household filers and $65,000 for married couples filing jointly. The credit will be automatically adjusted annually for inflation, with the initial amounts tied to the consumer price index in June 2025. The bill also adds this new child tax credit to the list of tax credits that will be periodically reviewed by the revenue interim committee to assess its effectiveness and impact. The new tax credit will apply to income tax years beginning after December 31, 2025, giving taxpayers the opportunity to claim it starting with the 2026 tax year.

Budget and Finance

https://bills.legmt.gov/#/laws/bill/2/LC3865