By the end of 2024, Minnesota will be ahead with major revamps to its Child Tax Credit, increasing it to as high as $1,750 for each eligible child. This move is envisioned to reduce child poverty by offering some reprieve to poor and middle-income families. The requirements and eligibility criteria for this credit should, therefore, be understood by all families who intend to earn from such a program.
Overview of the Minnesota Child Tax Credit
The Minnesota Child Tax Credit was designed to offer a helping hand to families in need, such as an added financial booster for each under-17 dependent. For every qualifying child, the credit could reach a high of $1,750 to provide a bigger wallet for house spending. It is one of the means of meeting the emergent requirement for monetary help amongst families, more so due to the economic challenges ignited by the pandemic.
Eligibility criteria
Families will be eligible for a full $1,750 CTC in Minnesota if they have incomes below the following threshold levels:
- Single filers with a maximum income limit of $29,500
- Married filing jointly couples with an income limit of $35,000.
In addition, the credit begins to phase out as household income increases. For families with one child, the benefit completely phases out at $52,495 of income.
However, the phase-out threshold rises with the number of children. A family with four children can still claim some of the credit having an income as high as $90,000. The system is thus set in a manner that ensures larger families receive a share of the credit with rising incomes.
Safe harbor protections
An important feature of Minnesota’s CTC is that it offers “safe harbor” protections. These provisions are designed to prevent families from losing their credit if their income rises. For instance, if a family receives advance payments of the credit and then their income rises, they will not need to repay any of the credit if their income stays below the phase-out thresholds.
This approach will more encourage families to use the advance payment system without fear of being in debt due to a change in financial situation.
Advance payment system
As of 2025, Minnesota families will be allowed to receive 50 percent of their total credit in advance payments before tax season. This is parallel to how the advance child tax credit payments by the federal government worked during the pandemic, monthly in a year, so that families are able to have the credit monthly. The timing of advance payments, which could be either monthly, bi-monthly, or quarterly, is yet to be determined by the Minnesota Department of Revenue.
The advance payment system is quite helpful in that it helps families gain immediate financial relief in running their daily expenses. With a portion of this credit given in advance, they can meet financial challenges more effectively and stay clear of falling behind with bills.
Impact on families
Already, the Minnesota Child Tax Credit has made a big difference in the lives of families. In 2023, about 210,000 families received an average total credit of about $2,500 per family or about $1,250 per child. For so many, this has become invaluable in keeping up with critical expenses like food, housing, and childcare.
Eventually, it’s expected to lower child poverty in Minnesota by about one-third, marking possible effectiveness of improving the economic stability of low- and middle-income households.
