The federal child tax credit helps offset the costs of raising kids and is worth up to $2,000 for each qualifying child. To get a federal child tax credit refund, a person must earn more than $2,500.

Raising children is expensive—recent reports show that the cost of raising a child is over $200,000 throughout the child’s lifetime. The American Rescue Plan Act of 2021 increased the federal child tax credit from $2,000 to $3,600 for qualifying children under age six, and $3,000 for other qualifying children under age eighteen, while allowing the credit to be distributed on a monthly basis.

• The provisions of the American Rescue Plan that strengthened the child tax credit expired at the end of 2021, despite lifting millions of families and their children out of poverty.

• In the face of federal inaction to maintain a robust child tax credit, states have a responsibility to enact policies that assist working families with children in meeting their basic needs.

• According to the National Conference of State Legislatures, twelve other jurisdictions have enacted a state child tax credit. 

• State laws vary regarding refundability and how child tax credits are calculated. The two primary approaches are either establishing a fixed limit or a percentage of the federal child tax credit. The fixed limit for state child tax credits ranges from $75 to $1,000 per child. The percentage for state child tax credits range from five per cent to thirty-three per cent of the federal child tax credit.

• Our proposal would establish a refundable child tax credit for Hawaiʻi's working families of $1,000 for each child aged 0-5 and $500 for each child aged 6-17, to be distributed to qualifying taxpayers on a monthly basis.