Governor Kathy Hochul has proposed tripling the Child Tax Credit for children under four years old and doubling the average tax credit for all families. Hochul released the proposal in advance of her upcoming State of the State 2025 address.
The expanded Child Tax Credit Program is estimated to benefit 215,000 households and 355,000 children in Long Island and 2.75 million children across the state.
The plan would give 1.6 million New York families an annual tax credit of up to $1,000 per child under age four and up to $500 per child from four through sixteen.
This proposal represents the single largest increase to New York’s child tax credit in its history, and a significant increase above the value of the existing credit, which currently provides only up to $330 per child.
“From groceries to strollers to kids’ clothes, the cost of living and raising a family is still too damn high — and that’s why we’re proposing a massive increase in New York’s child tax credit to put up to $1,000 per kid back in the pockets of hardworking families,” Governor Hochul said. “As New York’s first mom governor, I know how hard it can be for parents to make ends meet — and I’ll never stop fighting to make New York more affordable for every family.”
Under the expanded program a family of four with a toddler and school-age child, and a household income up to $110,000, would receive a credit of $1,500 per year which is nearly $1,000 more per year than under the current program.
The Governor’s announcement did not provide any information on how much this expanded program will cost. The rub in these programs is that what might benefit one taxpayer is paid for by another taxpayer. The government has no money of it’s own, so when rebates and tax credits are “given” all the money comes from other taxpayers.
The Child Poverty Reduction Advisory Council did estimate last year that if the Child Tax Credit were doubled it would cost taxpayers $9 billion. The Governor’s proposal to triple it and add other income levels will significantly raise that cost.
While the full credit is available to jointly filing households up to $110,000, the expanded credit combined with its gradual rate of phase-out means even a family of four with household income of $170,000 would receive over $500 per year. That family would not have qualified for any credit under the current program.
The credit will be phased in over two years, with households with children under four eligible for their $1,000 credit for the 2025 tax year and those with children over four eligible for the $500 credit for the 2026 tax year. The Empire State Child Credit is a refundable credit, which can either help offset taxes or be paid out directly to taxpayers as a refund.