Supporting Families Through Smart Tax Policy

Minnesota took a major step forward in supporting families with the passage of the nation-leading Child Tax Credit (CTC) in 2023. This historic legislation, which the Minnesota Catholic Conference (MCC) helped spearhead, has been an overwhelming success. It has helped families in need absorb the costs of inflation and meet the rising expenses of raising children. Now, legislators have the opportunity to build on that success by expanding the CTC to reach even more Minnesota families.

Policy prioritizes families

At its core, tax and budget policy should prioritize the well-being of families. Raising children is essential work, not just for individual households but for the future of our state. A society is only as healthy and stable as its families. It is in the state’s interest to help families thrive and truly make Minnesota one of the best places in the country to raise a family. Expanding the CTC is a concrete, bipartisan way to do just that.

During 2023 tax filing, CTC benefited 84% of eligible households, totaling 224,000 filers and impacting the lives of over 452,000 children. That is meaningful support in the face of skyrocketing costs for food, gas, housing, and other necessities. On average, families receive about $1,200 per child, with some qualifying for up to $1,750.

Minnesota can do better

The current credit begins phasing out at a household income of $35,000. While it does reach into the middle class since the formula is calculated based on the number of children within a family, we are proposing to expand eligibility even further. By increasing the phaseout threshold by 20 percent, we could reach an additional 112,000 filers and around 200,000 more children. That would mean over half of Minnesota’s 1.3 million children would benefit from the CTC.

That is a game-changer, as the CTC provides meaningful tax relief by first and foremost putting trust in families. Families are free to use the money to meet their needs—whether that be for groceries, school supplies, clothing for their children, or even a family vacation so they can spend quality time with one another. The CTC helps remove financial barriers so parents can focus on the most important job there is: raising the next generation.

Tax relief we can agree on

This effort has genuine bipartisan momentum. Legislators from across the political spectrum have signed on as co-authors to H.F. 2339 / S.F. 2508, and support continues to grow. This bill cuts through partisan divides to deliver real, meaningful tax relief. It is perhaps the best hope this session for giving tangible relief to families. This is, however, just one of the proposals on the table, and other creative ways to expand the CTC are also being considered.

With limited resources and many competing priorities, it is critical that Minnesota invests where it matters most. Expanding the CTC is a fiscally responsible, morally sound, and politically viable policy. Minnesota has already led the nation once. Let’s keep going. Families are counting on it.