In July, the state legislature of Maine enacted a modification to the Dependent Exemption Tax Credit, also known as the state’s Child Tax Credit, rendering it fully refundable. As a result, eligible recipients may be entitled to a maximum of $300 for each child in the upcoming 2024 tax period. Following the federal government’s scaling back of the Child Tax Credit for the year 2023, several states have taken measures to alleviate the financial impact on families within their borders.
Maine is among these states, having legislated a child tax credit that grants up to $300 per qualifying child. At the outset of the current year, the Maine government, backed by a $4 million budgetary provision, widened the scope of the Dependent Exemption Tax Credit to ensure its full refundability. This move is set to offer a financial advantage of as much as $300 for each child in qualifying families next year, catering to children under the age of 18.
Tax Thresholds for Maine’s $300 Child Tax Credit in 2024
Eligibility for this $300 refundable credit is contingent upon income thresholds; married couples filing together are required to have a federal adjusted gross income not exceeding $400,000, while the cap for single filers is set at $200,000 per annum. The value of Maine’s Child Tax Credit experiences a gradual reduction of $7.50 for every additional $1,000 earned beyond the set income parameters. Therefore, the upper limit for married couples to receive any credit is $440,000, while for single filers, the ceiling is $240,000 for the tax year 2024.
The statute ratified in July also stipulates that the Child Tax Credit will be subject to an increase, in line with inflation rates, beginning on January 1, 2025. This provision was initially introduced in 2018.
It is important to recognize that this fiscal incentive pertains to the 2024 fiscal year. Hence, taxpayers will be able to apply for this state Child Tax Credit when submitting their tax returns for 2024 in the subsequent year, 2025, barring any changes to the current verification process for this refundable credit.
Beyond the Child Tax Credit, the package, which approaches $400 million, will introduce additional advantages for Maine’s families, including an initiative for paid family and medical leave, as well as wage enhancements for professionals in the childcare sector, among others.