Virginia lawmakers propose $500 child tax credit for low-income families

On January 10, 2024, Virginia lawmakers introduced House Bill 969, a significant piece of legislation aimed at providing financial relief to families through a new child tax credit. This bill, which is set to take effect for taxable years beginning January 1, 2024, proposes a refundable tax credit of $500 for each dependent child under the age of 18, targeting families with an adjusted gross income not exceeding $100,000.

The primary objective of HB 969 is to alleviate the financial burden on families, particularly in the wake of rising living costs and economic challenges. By offering a refundable credit, the bill ensures that families can receive a refund even if their tax liability is lower than the credit amount, thereby enhancing its accessibility. The Tax Commissioner is tasked with developing guidelines for claiming the credit, which will be exempt from the usual administrative processes, potentially streamlining the application for families.

Support for the bill comes from a bipartisan group of patrons, including Tran, Bennett-Parker, Cousins, Hernandez, Coyner, and Scott, P.A. However, as with many tax-related proposals, there may be debates surrounding its fiscal implications. Critics could argue about the potential impact on state revenue and whether the credit adequately addresses the needs of lower-income families, particularly those just above the income threshold.

The introduction of HB 969 reflects a growing recognition of the need for targeted financial support for families in Virginia. If passed, the bill could have significant social implications, potentially reducing child poverty rates and providing families with additional resources for education, healthcare, and other essential needs.

As the bill moves to the Finance Committee for further discussion, stakeholders will be closely monitoring its progress and the potential amendments that may arise during the legislative process. The outcome of HB 969 could set a precedent for future tax relief measures aimed at supporting families across the Commonwealth.