Child tax credit would expand to 18-year-olds under bill

If you are 17, going on 18, your family may be about to lose a tax credit.

Minnesota families with children up to age 17 are eligible for the child tax credit, which is equal to $1,750 per qualifying child in tax year 2024, with no limit on the number of children in a household who may qualify.

But, when they turn 18, a different tax credit kicks in. Within the state’s working family credit is an older child credit that applies to qualifying 18-year-olds and those ages 19 to 23 who are students or permanently disabled. In tax year 2024, that’s worth $970 for one qualifying child, $2,210 for two and $2,630 for three or more older children.

Rep. Matt Norris (DFL-Blaine) is proposing that 18-year-olds should still qualify for the child tax credit. He’s the sponsor of HF4823, which would allow children aged 18 to qualify for the $1,750 credit for younger children rather than the credit for qualifying older children.

On Thursday, the House Taxes Committee laid the bill over for possible inclusion in a larger tax bill.

“I think this tax credit was one of the best things we passed in 2023,” Norris said. “Independent estimates projected that it would cut childhood poverty here in Minnesota by one-third. And it’s hard to envision any other single policy that has that significant of an impact on improving life for Minnesota working families and their children.

“But the reality is that most 18-year-olds still live at home. Most of them are still in high school. It just seems to be a natural fit that we should expand this successful child tax credit to include 18-year-olds.”

“These are meaningful dollars to these families,” said Jessica Webster, a staff attorney with Mid-Minnesota Legal Aid. “And 18-year-old youth don’t cost less than 17-year-old youth.”

For tax year 2024, the Revenue Department estimates that, with the change, about 9,800 18-year-olds would qualify for the child credit, with an average increase in the credit of $716. It also estimates that the change would cost the General Fund $7.8 million in fiscal year 2025, with similar totals in ensuing years.