Minnesotans can claim advanced payment plan for Child Tax Credit

Minnesota families benefiting from the state’s child tax credit will be able to cash in early next year, Gov. Tim Walz announced on Wednesday. Minnesota is the first state in the nation to offer this option for Child Tax Credit recipients.

“The goal of this nation-leading tax credit is to lower child poverty and provide tax relief for working class families in Minnesota. With the advance payment option, we’re making it easier for families to manage their annual household budget,” Governor Tim Walz said in a statement. “This new option will increase financial freedom and ensure families have the support they need all year long.”

The tax credit was signed into law in 2023 and included a provision for the state revenue commissioner to establish an advance payment process for child tax credits. That process will now be in effect for the upcoming tax season.

The tax credit law provides up to $1,750 per child that diminishes as incomes rise. Last year, 223,000 households claimed the credit, for an average of $1,242 per child.

Here’s how it works: Taxpayers who choose to receive an advance tax credit when filing their 2024 tax returns will receive the full 2024 credit and part of the next year’s credit as three payments that will be distributed in the latter half of 2025. The rest of the 2025 child tax credit will be applied to the following year’s tax return.

There is no limit on the number of children that can be claimed for the tax credit, but the sum per child starts to decrease for individuals making more than $31,090 and joint filers earning more than $36,880.

More information on the child tax credit program is available on the Minnesota Department of Revenue’s website.