Bill would give most Nebraska families $1,000 tax credit per child

LINCOLN — Two years ago, a temporary, pandemic-era boost in the federal child tax credit made back-to-school shopping fun for Cindy Meyer.

The mother of two managed to get everything on her children’s school supply lists without worrying about whether her budget would stretch far enough. She could even afford new first-day outfits to replace clothes her children had outgrown.

That’s why, on Wednesday, Meyer urged Nebraska lawmakers to create a state child tax credit that could offer families the same kind of financial breathing room.

“This bill would help the children of this state with getting their needs met,” she said.

Meyer joined several others testifying in support of Legislative Bill 294, introduced by State Sen. Danielle Conrad of Lincoln. The measure was one of three heard by the Revenue Committee Wednesday that would create or expand state income tax credits benefiting children and working families.

Conrad said she introduced LB 294 after meeting struggling family after struggling family on the campaign trail last year. While looking for policies to help them, she discovered other states that have implemented child tax credits.

She also found evidence that such credits have proven effective in lifting children out of poverty and helping families generally. Research based on U.S. Census Bureau data showed that the 2021 enhancement of the federal child tax credit cut child poverty rates by 46% nationally.

“That policy choice was able to make a really positive difference for families,” Conrad said. “I’m not sure we’ll find a better bang for our buck when it comes to supporting families.”

LB 294 would provide refundable tax credits of $1,000 per child for families with incomes up to $110,000 for married couples or $92,500 for head of household. The credits would be phased out for families with higher incomes. The credits would be provided for children from birth up to age 18.

Conrad said about 478,000 Nebraska children, or 81% of those in the qualifying age group, would benefit from the credits. But, in response to questions from Sen. Lou Ann Linehan of Elkhorn, Conrad said she would be willing to talk about narrowing the bill to target young children or lower-income households.

As introduced, her proposal would cost the state about $380 million annually, according to the legislative fiscal office. The first year’s cost would be $513 million because it would cover 17 months, rather than 12 months.

Garret Swanson, speaking for the Holland Children’s Movement in support of the bill, said conversations with other people convinced him that a child tax credit would be popular. He also said the credit could help Nebraska stay a step ahead of its neighbors and attract more families to the state.

Tom Venzor, executive director for the Nebraska Catholic Conference, backed the bill because it would provide public support for families and the family structure. He also said that, in an era when states regulate abortion, Nebraska needs to support families so they “can say yes to life.”

No one appeared to oppose LB 294 or the other two bills heard Wednesday. Those included LB 318, introduced by Sen. Eliot Bostar of Lincoln, and LB 295, introduced by Conrad.

Bostar’s proposal would provide tax credits to parents to offset the cost of child care. The credits would range from $1,000 per child up to $5,000, depending on household income.

The bill also would provide tax credits to people or businesses that contribute to early childhood education programs. A third part of the bill would provide tax credits to child care employees who have worked at an eligible program at least six months.

Conrad’s LB 295 would increase the state’s Earned Income Tax Credit to 17% of the federal amount, up from 10% currently. The refundable tax credit is available to low-income working people.