CT is offering $250 child tax rebates starting this week

With cash-strapped families the focus but boosting as well those making good money — and spending some of it on leisure pursuits — Connecticut has begun taking applications for a child tax rebate, with the goal of delivering payments before Labor Day.

Under the one-time program, couples filing joint taxes for $200,000 or less in income last year can apply for direct payments, at $250 for each child below age 18 and capped at $750 for three. The thresholds for single-earner filers and heads of households are set at $100,000 and $160,000 respectively.

Those who made slightly more than the income threshold in 2021 can still qualify for the rebate, which is shaved 10 percent for each extra $1,000 in income on the year.

“It’s a big deal — and it’s certainly something that will help people,” said Mark Boughton, commissioner of the Connecticut Department of Revenue Services, speaking in mid-May on plans for the child tax rebate. “This morning when I filled up my tank with gas, I think I paid $67. … This money really will be well received.”

The state estimates as many as 350,000 families will benefit and as of 5 pm Wednesday, over 8,000 applications had been filed. The White House released estimates in March that 390,000 Connecticut families claimed a child and dependent care tax credit on their 2021 returns, that was included as a relief measure in the American Rescue Plan.

Parents have until July 31 to claim the child tax rebate from the Connecticut Department of Revenue Services, with payments slated to go out by late August. The application and pointers are online at portal.ct.gov/drs, with phone assistance available through a DRS hotline at 860-297-5999 or the United Way’s 2-1-1 assistance line.

But it appears likely that some of the rebates will be claimed by earners who are comfortably well off two years after Connecticut workplaces reopened from weeks of hibernation at the outset of the COVID-19 pandemic.

In April, dining out and lodging represented the second biggest increase in consumer spending nationally, according to estimates last week by the US Bureau of Economic Analysis. Recreational goods and services combined for one of the four biggest outlays as well, after vehicle purchases and housing costs.

Just over 224,000 Connecticut couples reported combined income between $100,000 and $200,000 in 2019, the most recent year the Internal Revenue Service has broken out earnings across tax brackets and states.

But with inflation outstripping wage gains for many families, the Connecticut General Assembly and the Lamont administration set the thresholds relatively high to ease pressure on a larger number of households, according to Rep. Sean Scanlon, D-98, Co-Chair of the Finance, Revenue and Bonding Committee.

“We felt that $200,000 in joint income was probably the top tier or top decile of a middle-class family here in Connecticut, Scanlon told Hearst Connecticut Media on Wednesday. “Is there a certain difference in the way that inflation is hitting somebody who has joint income of $200,000 versus joint income of $50,000? Absolutely, however people at that $200,000 are still being impacted.”

And while Connecticut has been chipping away at its unemployment rate, at 4.4 percent in April it remained a full percentage point higher than in February 2020 as the pandemic loomed.

Nearly three in four Connecticut households who depend on a woman as the primary earner would qualify for the full tax credit, according to Tanya Barrett, a senior vice president overseeing the United Way of Connecticut’s 2-1-1 services.

“Despite working really hard and struggling, these families often find it hard to make ends meet and have to go without the basic necessities,” Barrett said.

The child tax credit among the latest of a succession of assistance programs for Connecticut residents, who have seen costs rocket up for needs like housing, vehicular expenses and child care. Prices are rising even as the General Fund’s coffers swell after two years of federal pandemic assistance and increased tax collections.

In a 2020 study, the advocacy organization Connecticut Voices for Children dubbed the state’s tax code the third most “regressive” in the nation for the percentage of household income that low-earning families pay in taxes compared to upper-class earners and other taxpayers like corporations.

While the child tax rebate is a one-time benefit, the state’s budget adjustment for the 2023 fiscal year includes a permanent expansion of a property tax credit to $300, while removing a restriction that limited the credit to property owners 65 years or older. And Connecticut will no longer tax retirement income drawn from pensions and annuities.

Scanlon said if there is significant interest in the child tax rebate, he plans to push to make it permanent.

Alex.Soule@scni.com; 203-842-2545; @casoulman

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