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, the federal child tax credit provided a credit of up to $2,000 per child under age 17. If the credit exceeded taxes owed, families could 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—could receive a nonrefundable credit of up to $500 each. Under the American Rescue Plan Act (2021), the credit was increased to $3,600 under age 6 and to $3,000 for children age 6-17. The credit was made fully refundable and most families will receive a monthly payment of $250 or $300 per child . The Rescue Plan Act’s increase in the maximum credit amount begins to phase out for single heads of households making $112,500, and married couples making $150,000. This expansion in the credit was only for 2021, but could be extended or made permanent by Congress.
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.