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House panel hears HB537, a $3,000 birth tax credit aimed at easing newborn expenses
Summary
Rep. Lucas Schubert introduced HB537 to provide up to $3,000 in tax relief for families after the birth of a child, targeted by income thresholds. Supporters said it helps new parents with immediate costs; opponents cautioned that tax-credit timing delays payment and urged alternative delivery mechanisms.
Representative Lucas Schubert presented House Bill 537 to the House Taxation Committee, proposing a birth or newborn tax credit of up to $3,000 for families within specified income thresholds (initially $60,000 single / $120,000 married, with a phaseout). Schubert said the credit is structured to be tied to taxes actually paid (state, federal, FICA) so the state does not provide full refundable payments to non‑taxpayers and to limit fiscal exposure.
Advocates including 0 to 5 Montana and the Montana Catholic Conference supported the proposal as targeted relief for working families who face high one‑time expenses at birth and early infancy. Caitlin Jensen of 0 to 5 Montana said the credit would help families cover items such as cribs, car seats and postpartum care and could support infant care stability during the first year.
Opponents, including the Montana Society of CPAs, expressed concern that using a tax credit delays delivering aid until tax filing and creates administrative complexity. Alan Lloyd said families with immediate newborn needs would not receive cash at the time of birth under the tax‑credit approach and urged considering delivery mechanisms that move money to parents sooner.
Department of Revenue staff answered questions about administration and refundability. Aaron McNay said the current draft would result in Montana refundability—if an individual’s Montana tax liability is less than the credit, the state would refund the difference—while the sponsor reiterated options for lowering income thresholds or adjusting timing in amendments. The committee closed the hearing with a request that staff refine administration details and fiscal estimates before further action.
