$1,000 Utah Child Tax Credit Now Covers More Children: See How

Utah lawmakers expanded the child tax credit to cover more children. The Utah Child Tax Credit now applies to children under 5 years old, compared to children under 4 years old previously. Separately, lawmakers also approved income tax cuts worth about $170 million.

Utah Child Tax Credit: What does it offer?

Last Wednesday, Utah lawmakers approved HB153, which would raise the age limit for the state’s child tax credit program to children under 5. The bill is sponsored by Rep. Susan Pulsipher (R-South Jordan).

Utah offers a $1,000 nonrefundable income tax credit to qualifying parents. The Utah Child Tax Credit is being phased out for single filers earning more than $43,000 and $53,000 for joint filers. The tax credit is phased out by $10 for every $1 earned over the threshold.

In addition to expanding the age limit, HB153 increases the number of children allowed in unlicensed day care centers. The bill would allow unlicensed providers to care for up to eight children, up from six previously.

The controversial bill has stirred much emotion and debate, but cleared its final hurdle on Wednesday. HB153 narrowly passed the Senate Tuesday morning, 15-12, and the House approved it Wednesday morning, 50-21. The bill now heads to Gov. Spencer Cox’s desk.

Much of the criticism of HB153 focused on easing restrictions on in-home child care providers. Rep. Pulsipher added two requirements for unlicensed service providers to address these issues:

First, unlicensed providers must undergo a background check, and second, they cannot care for more than two children under the age of three at a time.

Another income tax cut for taxpayers

In addition to expanding Utah’s child tax credit, lawmakers on Wednesday also approved SB69. The bill reduces the state income tax rate from 4.65% to 4.55%. Sen. Chris Wilson (R-Logan) is the bill’s sponsor.

“If you want a strong economy, you don’t want to tax productivity,” Senator Wilson told the House Ways and Means Committee last week. “If you tax productivity, you will shrink the economy.”

A recent analysis by the Institute on Taxation and Economic Policy found that tax cuts would greatly benefit the state’s wealthiest residents. More than 60% of the cuts would benefit the top 20% of state earners, according to the nonprofit liberal tax policy think tank.

Reducing income taxes has been a top priority for Republicans. If this bill becomes law, it will mark three years since the state lowered income taxes. The tax cut is estimated to cost the state nearly $10 million more than its initial estimate of $160 million due to the expected increase in revenue collections.

Democrats in the House and Senate opposed another tax cut this session, but three minority lawmakers in the House supported Republicans passing the tax cut bill 55-11. Last month, the Senate approved the bill (vote 23 to 6). The bill now heads to Governor Cox’s desk.