Connecticut Legislature proposes tax credit for families with children starting in 2025

On April 9, 2025, the Connecticut State Legislature introduced House Bill 7272, a significant piece of legislation aimed at providing financial relief to families with dependent children. The bill proposes a tax credit for eligible taxpayers, defined as residents subject to state income tax, for each dependent child under the age of seventeen.

Key provisions of House Bill 7272 include a credit of $150 per child, applicable to a maximum of three children. However, the credit amount is subject to a gradual reduction based on the taxpayer's federal adjusted gross income. Specifically, the credit decreases by 10% for every $1,000 over certain income thresholds: $100,000 for single filers, $160,000 for heads of household, and $200,000 for married couples filing jointly. This structure aims to target assistance towards lower and middle-income families while phasing out benefits for higher earners.

The introduction of this bill has sparked notable discussions among lawmakers, particularly regarding its potential impact on state revenue and the effectiveness of the credit in alleviating financial burdens for families. Proponents argue that the bill addresses the rising costs of living and supports families in need, while opponents express concerns about the long-term fiscal implications for the state budget.

Economically, the bill could provide a boost to local economies by increasing disposable income for families, potentially leading to greater consumer spending. Socially, it aims to enhance the financial stability of families, which could have positive effects on child welfare and education.

As the legislative process unfolds, experts anticipate that further amendments may be proposed to refine the income thresholds or adjust the credit amount. The outcome of House Bill 7272 could set a precedent for future tax relief measures in Connecticut, making it a critical point of focus for both lawmakers and constituents in the coming months.