Minnesota's child tax credit could increase for families in 2026
Families begin receiving child tax credit payments
Advocates say more families can get help from the credit because the bill eliminates the earned income requirement for the first time.
ST. PAUL, Minn. (FOX 9) - Minnesotans claiming a child tax credit first instituted in 2023 for low-income families could receive even more in 2026 if a new bill is approved by Minnesota lawmakers.
Minnesota Child Tax Credit increase
What we know:
For the 2024 tax filing year, a new child tax credit became available for Minnesotans, up to $1,750 per child, with no limit on the number of children claimed.
The refundable credit is issued for families making less than $31,950 – or $37,910 for married joint filers.
The credit applies to dependent children ages 0–17, while a smaller credit for "qualifying older children" ages 18 to 23 also offers $1,000 if a taxpayer has one older child, $2,279 for two older children, and $2,710 for three or more.
Beginning in 2025, taxpayers could elect to receive part of their Child Tax Credit in advance payments rather than waiting until they file their tax return.
Dig deeper:
A new proposal being considered among Minnesota lawmakers would raise the credit from $1,750 to $2,000 – for taxable years beginning after Dec. 31, 2025.
Then starting in 2027, for taxable years beginning after Dec. 31, 2026, the credit value would be adjusted for inflation with the base year/amount being $2,000.
What they're saying:
"We set a goal of making Minnesota the best state in the nation to grow up in. Our child tax credit will mean thousands of dollars for families with children to meet their basic needs," said Gov. Walz during the announcement in 2023 as the first tax credits were being unveiled. "That’s money back in the pockets of hard-working Minnesotans."
Big picture view:
Since the credit began, based on returns filed through early January 2025, Minnesota’s House Research Department says the combined cost of the child and working family credits were roughly $724.8 million in tax year 2023.
Of the amount, about 77% of credits before the phaseout were young child credits, 20% were working family credits, and 3% were credits for older children.