New child tax credit available for 300,000 families this year

New child tax credit available for 300,000 families this year

New child tax credit available for 300,000 families this year

Gov. Tim Walz and other state leaders gathered Monday to urge Minnesotans to take advantage of the state’s new child tax credit.

That credit was part of last year’s state tax bill and could help nearly 300,000 lower-income households save thousands of dollars this tax season.

RELATED: Tax bill passes Minnesota Senate, now heads to Walz for approval

Under the bill Walz signed last summer, some Minnesotans can claim a credit of up to $1,750 per child on their 2023 returns. Lawmakers are hoping it will reduce child poverty by one-third.

“If we’re going to get to 33 percent child poverty reduction that Columbia University says this credit will attain, we’ve got to have everyone who can qualify to do that,” says Minnesota Revenue Commissioner Paul Marquardt.

Keep in mind that there are income restrictions for the credit. The tax credits begin to phase out for individual taxpayers earning more than $29,500 and joint filers earning more than $35,000.

Walz says the $400 million in tax credits will ripple through the economy while helping families out of poverty.

“This money is going to families who are going to buy shoes in their local store,” Walz said at a news conference at Prepare + Prosper, a nonprofit tax preparer. “It’s going to buy tires at the local tire store. It’s going to buy a water heater at Lowe’s or wherever you’re going.”

If you need help filing your taxes, the governor’s office says there are more than 170 locations offering free tax preparation assistance.

Changes are also in play at the national level for taxes — the U.S. Senate is still considering the federal child tax credit.

Many experts are encouraging families to wait to file taxes until those changes are finalized so they don’t have to amend returns later.

The federal credit would be $1,800 for 2023 tax returns, $1,900 the following year and eventually $2,000 per child for the 2025 tax returns.

It isn’t clear if that plan will pass the Senate but 5 EYEWITNESS NEWS will continue to track its progress.

RELATED: Tax season is under way. Here are some tips to navigate it.

If you’re interested in the free tax preparation sites in Minnesota, CLICK HERE to learn more about them.

The Minnesota Department of Revenue also notes that while many taxpayers file their property tax returns at the same time as income tax returns, the state can’t start processing those until July 1 so taxpayers can wait on property taxes.

For those who get a refund, click here to track it in Minnesota or here for Wisconsinites.

RELATED: State lawmakers, revenue commissioner say they’ll fix tax deduction error