Bill > S641

This bill reenacts and substantially modifies North Carolina's Child Tax Credit, providing a more generous and comprehensive tax benefit for families with children. The bill establishes a new credit structure where families can claim $1,900 for each qualifying child under six years old and $1,600 for children six and older, with the definition of "qualifying child" based on federal tax code section 152(c). The credit's amount will phase out proportionally based on the income phase-out applicable to the federal earned income tax credit, replacing the previous income-based credit table. A significant change is that the credit is now fully refundable, meaning that if the credit exceeds the taxpayer's tax liability, the state will refund the difference. The bill aims to support low and moderate-income families by providing financial assistance for child-rearing expenses, addressing concerns about rising childcare costs and the state's declining birth rate. The new child tax credit will take effect for taxable years beginning on or after January 1, 2025, allowing families to benefit from this expanded tax relief in the upcoming tax years.

https://www.ncleg.gov/BillLookUp/2025/S641