Child Care/Child Tax Credit

The Child Tax/Child Care Tax Credit is an Oklahoma tax credit that can be claimed by parents of dependent children. Taxpayers can claim the greater of five percent of the federal Child Tax Credit or twenty percent of the federal Child Care Tax Credit. In both cases, federal adjusted gross income cannot exceed $100,000 for married couples filing jointly. 

Until 2021 and then again beginning in 2022, the federal child tax credit provides a credit of up to $2,000 per child under age 17. If the credit exceeds taxes owed, families can receive up to $1,400 per child as a refund. Other dependents—including children ages 17–18 and full-time college students ages 19–24— can receive a nonrefundable credit of up to $500 each. Under the American Rescue Plan Act (2021), the credit was increased to $3,600 for children under age 6 and to $3,000 for children age 6-17. The credit was made fully refundable and most families received a monthly payment of $250 or $300 per child . The Rescue Plan Act’s increase in the maximum credit amount began to phase out for higher-income families. These expansions in the credit expired at the end of 2021 after Congress failed to renew it.

For Fiscal Year 2020, the credit was claimed on 367,145 Oklahoma tax returns for a total amount of $42.9 million, according to the Oklahoma Tax Commission’s Tax Expenditure Report.