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Panel hears bill creating a $3,000 'birthday' tax credit for families with newborns
Summary
House Bill 537 would create a newborn tax credit of up to $3,000 for working families, with income caps and a phase‑out; sponsors argued it helps offset immediate costs of childbirth and supports family stability, while tax professionals urged caution about timing and delivery mechanisms.
Representative Lucas Schubert opened the HB 537 hearing saying the bill would create a one‑time $3,000 “birthday” tax credit for qualifying taxpayers who have a newborn. The proposed credit targets single filers with adjusted gross income under $60,000 and joint filers under $120,000, with a phase‑out of $150 for every additional $1,000 of income above those thresholds.
Schubert said the credit is designed to be narrowly targeted and not fully refundable: it applies only to taxpayers who have paid state income tax, federal income tax or FICA during the tax year, so the amount credited is limited to taxes the family actually paid. He told the committee the $3,000 figure roughly matches average out‑of‑pocket maternity‑related costs cited in testimony and that the bill has a relatively modest fiscal note compared with other family tax proposals.
Supporters included early‑childhood advocates and faith groups. Caitlin Jensen of Zero to Five Montana described the credit as a one‑time investment during a financially vulnerable period for families, noting higher infant care costs in the first year and saying the credit would improve family stability. The Montana Catholic Conference said the credit would help families manage basic newborn expenses and relieve pressure during early parenthood.
The Montana Society of CPAs opposed the bill’s structure, urging policymakers to consider faster or more direct support because a tax credit is realized only after tax filing; the society warned that families with immediate newborn costs would not receive funds in real time. Department of Revenue staff answered committee questions about administration and confirmed the bill, as written, would allow a refundable benefit with respect to Montana tax liability but that the credit is limited to the taxpayer’s aggregate state, federal and FICA tax payments per the bill text.
A number of committee members asked about the timing of benefits, administrative verification and fiscal cost; the sponsor noted an amendment under discussion to reduce income thresholds so the committee could consider a lower‑cost variant. Schubert urged the committee to pass the bill as a targeted tax reduction for working families with newborns and said it would signal state support for families with children.
The committee heard informational testimony from Department of Revenue staff and closed the hearing with no immediate vote on the measure.
