AUGUSTA - The Legislature's Taxation Committee voted Thursday to advance a measure from Rep. Mo Terry, D-Gorham, to improve economic security for Maine children by establishing a state refundable child tax credit, expanding the tax credits available for parents and other households with dependents.
LD 1544 would replace Maine's existing dependent exemption tax credit with a new child tax credit. In order for a family to qualify for the current non-refundable dependent exemption tax credit, they must make enough money to have taxable income. Terrys bill would remove minimum income requirements, making the credit available to the lowest-income Mainers with dependents. The new credit would also increase the annual amount from $300 to $350 per dependent and index that credit to inflation.
"Currently, one in ten Mainers are facing hunger, including one out of every six children," said Terry. "Providing families with this tax credit can help lower the rates of food insecurity, reduce child poverty and help more hard-working Maine families pay their bills and make ends meet."
In 2021, Congress temporarily expanded the federal child tax credit and made it fully refundable, but that expanded credit has since expired. Census data shows that child poverty dropped sharply last year, and that the expanded credit, in combination with other relief efforts, drove the child poverty rate to a record low of 5.2%. The Institute on Taxation and Economic Policy estimates that a refundable child tax credit could reduce child poverty in Maine by 12.3%, lifting roughly 3,500 Maine children out of poverty.
At its public hearing on May 4, the bill was supported by numerous advocacy organizations, including the Maine Council on Aging, Preble Street, Maine Community Action Partnership, Maine Council of Churches and Maine Center for Economic Policy.
The bill will move to the full Legislature for consideration in the coming weeks.
Terry, who represents part of Gorham, is serving her fourth term in the Maine House and serves as the House Majority Leader. She is a chef and small business owner with more than 25 years of experience in the food service industry.
Contact:
Brian Lee [Terry], c. 305-965-2744