D.C. is creating its own local child tax credit
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D.C. will start paying certain families $1,000 per child under a new tax policy.
Why it matters: Since the federal child tax credit doesn't actually benefit all families equally, Council members saw a local child tax credit as a way to cover the gap for the District families who need it the most.
The big picture: It's the first time a U.S. city is implementing a tax credit for children.
How it works: The D.C. program creates a credit worth $1,000 per child under 18.
- The credit is aimed at single filers making below $75,000 and joint filers making below $90,000.
- Taxpayers "with multiple children in higher income brackets will benefit too," a D.C. Council summary of the bill notes, but "concentrating on residents in these [lower] income brackets also bolsters the local safety net."
Between the lines: President Trump's "big, beautiful bill" made the federal child tax credit permanent, raising it from $2,000 to $2,200 per child for three years.
- But the lowest-income families won't get the full benefit of the increase, because parents don't make enough to qualify for the maximum credit, according to Brookings.
- Only two-thirds of filers in the $10,000–$20,000 income bracket received the credit in 2022, and only 50% of filers who made less than $10,000 got it that year, according to the Congressional Research Office. That's compared to nearly 100% of filers making $100,000 to $200,000.
Zoom in: D.C.'s new credit could help reduce child poverty by 25%, a report from the Center on Poverty and Social Policy at Columbia University suggests.
What they're saying: "The child tax credit is the single most effective anti-poverty program this country has ever seen," said D.C. Council member Zachary Parker, who pushed the legislation, per the Washington Post.
- About 1 in 5 children live in poverty in D.C., according to the Post.
What's next: The D.C. credit takes effect for tax year 2026, which means families can take advantage of it when they file their taxes in 2027.