S14502026 Regular Session

Amends existing law to extend the Child Tax Credit indefinitely.

TAXATION -- Amends existing law to extend the Child Tax Credit indefinitely.

IntroducedIn CommitteeFloor VoteEnacted

STATEMENT OF PURPOSE

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RS33273 / S1450 This legislation makes permanent the Idaho child tax credit that was enacted in 2018 and had an original sunset date of January 1, 2026. The Idaho child tax credit is a non-refundable credit of $205 per qualifying child. This legislation removes the sunset date and makes this policy permanent. This pro-family policy helps to offset some of the costs associated with raising children in Idaho.

FISCAL NOTE

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There is no new estimated impact to the state general fund because the economic forecasts produced by the Division of Financial Management assumed the tax credit would continue despite the sunset date of January 1, 2026. The child tax credit has reduced revenue to the state general fund by $63-$65 million each year, representing savings to families of that same amount. If the child tax credit were not to be extended, it would increase taxes on Idaho families by approximately $66 million and add that same amount of revenue to the state general fund in Fiscal Year 2027.

BILL TEXT

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LEGISLATURE OF THE STATE OF IDAHO Sixty-eighth Legislature Second Regular Session - 2026 IN THE SENATE SENATE BILL NO. 1450 BY STATE AFFAIRS COMMITTEE AN ACT1 RELATING TO TAXATION; AMENDING SECTION 63-3029L, IDAHO CODE, TO REVISE A2 PROVISION REGARDING THE CHILD TAX CREDIT; AND DECLARING AN EMERGENCY3 AND PROVIDING RETROACTIVE APPLICATION.4

Be It Enacted by the Legislature of the State of Idaho:5

SECTION 1. That Section 63-3029L, Idaho Code, be, and the same is hereby6 amended to read as follows:7 63-3029L. CHILD TAX CREDIT. (1) For taxable years beginning on or af-8 ter January 1, 2018, and before January 1, 2026, there shall be allowed to a9 taxpayer a nonrefundable credit against the tax imposed by this chapter in10 the amount of two hundred five dollars ($205) with respect to each qualifying11 child of the taxpayer. For purposes of this section, the term "qualifying12 child" has the meaning as defined in section 24(c) of the Internal Revenue13 Code. In no event shall more than one (1) taxpayer be allowed this credit for14 the same qualifying child. This credit is available only to Idaho residents.15 Any part-year resident entitled to a credit under this section shall receive16 a proportional credit reflecting the part of the year in which the part-year17 resident was domiciled in Idaho.18 (2) In the case of divorced parents or parents who do not live together,19 if the qualifying child is in the custody of one or both of the child's par-20 ents for more than one-half of a calendar year, such child is the qualifying21 child of the custodial parent for the taxable year beginning during such cal-22 endar year. However, the child may be the qualifying child of the noncusto-23 dial parent if either of the following requirements are met:24 (a) A court of competent jurisdiction has unconditionally awarded, in25 writing, to the noncustodial parent the tax benefits associated with26 the child pursuant to section 32-706, Idaho Code, and the noncustodial27 parent attaches a copy of the court order to the noncustodial parent's28 income tax return for the taxable year; or29 (b) The custodial parent signs a written declaration that such custo-30 dial parent will not claim the credit of this section with respect to31 such child for any taxable year beginning in such calendar year and the32 noncustodial parent attaches such written declaration to the noncusto-33 dial parent's income tax return for the taxable year beginning during34 such calendar year.35

SECTION 2. An emergency existing therefor, which emergency is hereby36 declared to exist, this act shall be in full force and effect on and after its37 passage and approval, and retroactively to January 1, 2026.38