Child tax credit worth up to $1,750: Who qualifies and how to apply?
Minnesota expands its Child Tax Credit in an attempt to cut child poverty by one-third. Who qualifies, and how can it be claimed?
Since the more valuable Child Tax Credit, included in the American Rescue Plan, expired in 2023, various states have moved to increase the value of their state-level credit to support families with children. One of these states is Minnesota, where a new Child Tax Credit worth up to $1,750 has been approved for the 2024 fiscal year.
According to a message put out by the office of Governor Tim Walz, the expanded credit is expected to cut child poverty in the state by one-third and will be received by “nearly 300,000 households, including 513,000 children.” These figures represent around ten percent of households and more than a third of households with children. The Governor called attention to the fact that outside the counties that make up the Minneapolis and St. Paul region, “with five Minnesota counties where at least 1 in 5 children are living in poverty and each of those counties located outside the seven-county metro.”
Who is eligible?
When families file their income tax return in 2024, reflecting their income and earnings from 2023, the enhanced Credit for Minnesota Children and Working Families can be claimed. As mentioned, the credit is worth $1,750 per qualifying child, and the state does not limit the number of dependents that can be claimed. The credit, however, is aimed at helping the state’s most economically vulnerable households, with the state’s tax agency saying that it will “phases out if your income is over $29,500.”
Additionally, a tax filer must meet five requirements:
- Residency: One must have been a resident of Minnesota during the year you are claiming the credit
- Federal Earned Income Tax Credit: You cannot have a two-or-ten-year ban on claiming the federal Earned Income Tax Credit
- Qualifying Dependents: Those claimed must be younger than eighteen years of age.
- Dependent Status: You cannot be claimed as a depedent on another tax return
- Filing Status: If you are married but file your taxes separately you cannot claim the credit.
How to request the credit
Low-income households eligible to receive the credit will be able to do so during the tax filing season, which will begin in early 2024.
Those who did not receive the credit but were eligible in 2023, based on their income in 2022, can still submit a 2022 Schedule M1WFC, Minnesota Working Family Credit, to receive the funds. Based on the information provided, the Minnesota Department of Revenue will determine eligibility and, if eligible, how much the taxpayer will receive.