An interim study led by Sen. Nikki Nice, D-Oklahoma City, has brought into focus the potential advantages of revamping the child tax credit (CTC) system in Oklahoma. The study's findings were shared during a meeting of the Senate Revenue and Taxation Committee, suggesting that a modernized CTC could bolster outcomes for children and alleviate financial pressures on families. Nice remarked, "Oklahoma's child tax credit has not been updated since 2007, which means our state has not kept up with the cost of raising children," as reported by Oklahoma Senate press releases.
According to Dr. Jacob Bastian, Senior Fellow at the R Street Institute, the current non-refundable nature of Oklahoma's CTC is particularly disadvantageous for lower-income families who stand to gain the most from such credits. In a statement obtained by Oklahoma Senate Press Releases, he pointed out that a family earning less than $18,000 with three children might not owe any taxes, thus, they wouldn't benefit from the credit. In contrast, a more affluent family making $50,000 could claim the full CTC benefit. Bastian advocated for making the credit refundable, insisting that this policy could support stronger families and encourage workforce participation.
Eli Bylerly-Duke, State Policy Analyst at the Institution on Taxation and Economic Policy, highlighted Oklahoma's child poverty numbers, saying that one in five children in the state live in poverty but a $1,400 base credit could reduce that by roughly a quarter. He emphasized the importance of fully refundable credits that include additional benefits for younger children due to higher costs associated with their care, as mentioned in the Oklahoma Senate. press releases
The real-world implications of the CTC were underscored by testimonies like that of Jessie Barnett from Woodward. Barnett, with an estimated annual income between $40,000 to $45,000 for a family of six, shared how federal tax credits provided her more than $3,000 which went toward family necessities. However, as she told Oklahoma Senate Press Releases, the Oklahoma child tax credit granted them only $100 of the $400 they were eligible for due to their low state tax liability. If the CTC were refundable, she asserted, the additional money would make a significant difference to families like hers, providing financial stability but not enough to dissuade employment.
Sen. Nice acknowledged the testimony presented and affirmed her stance on the matter with the support of Sen. Dave Radar, R-Tulsa, chairman of the Revenue and Taxation Committee. "A refundable child tax credit is fiscally responsible, pro-family, pro-work, and the additional resources help families raise healthier kids with stronger test scores and better school completion," she stated. Nice expressed hopes of drafting legislation to actualize these proposed changes in Oklahoma's tax credit system, as detailed in the Oklahoma Senate press releases.
