House Bill 628 would reenact North Carolina’s child tax credit after its prior expiration and make it available again for taxable years beginning on or after January 1, 2025. The bill restores G.S. 105-153.10, allowing taxpayers who qualify for the federal child tax credit to claim a state income tax credit for each qualifying child. The credit amount is tiered by adjusted gross income and filing status, with larger credits for lower-income taxpayers and no credit above specified income thresholds.
The bill also makes the credit refundable, meaning taxpayers whose credit exceeds their state income tax liability would receive the difference as a refund. It preserves existing rules for part-year residents and nonresidents by prorating the credit, and it limits married taxpayers filing separately so they cannot collectively claim more than the amount allowed on a joint return. In effect, the bill would reduce state income tax liability for eligible families and provide direct cash benefits to some households through refunds.
Impact
The bill would amend North Carolina income tax law by reenacting G.S. 105-153.10 and restoring a state child tax credit that had expired. It would affect taxpayers with qualifying children, especially lower- and middle-income families, and would require the Department of Revenue to administer the credit as refundable beginning with tax year 2025. Because the credit is tied to the federal child tax credit and uses federal definitions of qualifying child, it would operate within the state individual income tax system while relying on federal tax concepts.
Sentiment
The available context suggests generally favorable treatment of the bill, as reflected by its introduction by multiple sponsors and its straightforward policy goal of restoring a family tax benefit. No committee transcript or vote record is provided, so there is no documented debate or recorded opposition in the materials supplied. The bill’s title and structure indicate a policy preference for supporting households with children through the tax code.
Contention
The main potential points of contention are fiscal cost and distributional effects, since reenacting a refundable credit would reduce state revenue and provide payments to some taxpayers even when they owe little or no tax. Another possible issue is whether the income thresholds and credit amounts are set at appropriate levels, because the bill phases out the benefit for higher-income filers and gives larger benefits to lower-income households. No specific objections or supporters are documented in the provided transcripts or votes.
A BILL to amend and reenact § 58.1-439.4 of the Code of Virginia, relating to child day-care facility investment and child day-care expense reimbursement tax credits.