Reenact Child Tax Credit.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 641

Short Title: Reenact Child Tax Credit. (Public)
Sponsors: Senators Chitlik, Bradley, and Everitt (Primary Sponsors).
Referred to: Rules and Operations of the Senate
March 26, 2025
*S641-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO REENACT THE CHILD TAX CREDIT. 2
Whereas, North Carolina is a pro-family, pro-child State; and 3
Whereas, decades of research documents the benefits of a refundable child tax credit, 4
including improved health, educational outcomes, and even higher future earnings potential for 5
children in claiming families; and 6
Whereas, the cost of childcare is prohibitively expensive for low - and 7
moderate-income families, forcing a choice between working to afford basics or caring for 8
children; and 9
Whereas, the cost of raising a child is causing many families to opt out of having 10
children altogether; and 11
Whereas, no family or individual should ever have to sacrifice parenthood because it 12
is too expensive; and 13
Whereas, the State's birth rate is falling, and it is in the economic interest of the State 14
to incentivize raising children for those who want this option; and 15
Whereas, the State of North Carolina has over 388,000 children living in poverty; and 16
Whereas, the expansion of the child tax credit during the COVID-19 pandemic was a 17
significant force in reducing child poverty to a historic low; Now, therefore, 18
The General Assembly of North Carolina enacts: 19
SECTION 1. G.S. 105-153.10 is reenacted as it existed immediately before its 20
expiration and reads as rewritten: 21
"§ 105-153.10. Credit for children. 22
(a) Credit. – A taxpayer who is allowed a federal child tax credit under section 24 of the 23
Code for the taxable year is allowed a credit against the tax imposed by this Part for each 24
dependent child for whom the taxpayer is allowed the federal credit. A taxpayer is allowed a 25
credit against the tax imposed by this Part in the amount of (i) nineteen hundred dollars ($1,900) 26
for each qualifying child of the taxpayer six years of age or under and (ii) sixteen hundred dollars 27
($1,600) for any other qualifying child of the taxpayer. A "qualifying child" is defined by section 28
152(c) of the Code. The amount of credit allowed under this section for the taxable year phases 29
out proportionally based on the income phase-out applicable to the federal earned income tax 30
credit provided in section 32 of the Code. is equal to the amount listed in the table below based 31
on the taxpayer's adjusted gross income, as calculated under the Code: 32
Filing Status AGI Credit Amount 33
Married, filing jointly Up to $40,000 $125.00 34
Over $40,000 35
Up to $100,000 $100.00 36
General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 641-First Edition
Over $100,000 0 1
2
Head of Household Up to $32,000 $125.00 3
Over $32,000 4
Up to $80,000 $100.00 5
Over $80,000 0 6
7
Single Up to $20,000 $125.00 8
Over $20,000 9
Up to $50,000 $100.00 10
Over $50,000 0 11
12
Married, filing separately Up to $20,000 $125.00 13
Over $20,000 14
Up to $50,000 $100.00 15
Over $50,000 0. 16
(b) Limitations. – A nonresident or part -year resident who claims the credit allowed by 17
this section shall reduce the amount of the credit by multiplying it by the fraction calculated under 18
G.S. 105-134.5(b) or (c), as appropriate. The credit allowed under this section may not exceed 19
the amount of tax imposed by this Part for the taxable year reduced by the sum of all credits 20
allowed, except payments of tax made by or on behalf of the taxpayer. G.S. 105-153.4. Married 21
individuals qualifying for a credit under this section who file separate returns may not collectively 22
claim more than the maximum credit allowed under a joint return. 23
(c) Credit Refundable. – If the credit allowed by this section exceeds the amount of tax 24
imposed by this Part for the taxable year reduced by the sum of all credits allowable, the Secretary 25
must refund the excess to the taxpayer. The refundable excess is governed by the provisions 26
governing a refund of an overpayment by the taxpayer of the tax imposed in this Part . In 27
computing the amount of tax against which multiple credits are allowed, nonrefundable credits 28
are subtracted before refundable credits." 29
SECTION 2. This act is effective for taxable years beginning on or after January 1, 30
2025. 31