Child tax credit needlessly complicated

It’s safe to assume that the Connecticut child tax credit, like the federal version it’s modeled after, was passed with the best of intentions. There are undoubtedly people who need a break in times of economic uncertainty, and the state is trying to help provide one. It’s a sound policy idea and one that makes sense at a time of budget surpluses.

The execution, on the other hand, has been something else entirely.

The deadline to apply for a $250-per-child state tax rebate is July 31, with as many as 350,000 poor and middle-class families eligible for the pandemic relief plan. But with time running out, state officials recently said only about half that many had put in for assistance. Program advocates say they are confident that last-minute applicants will make up much of that difference, but it’s inevitable that some number of people who are eligible will not receive the credit.

All of which raises an important question — was there a better way to do this?

The state, after all, has information on everyone’s income and how much taxes they’ve paid, and therefore the information on eligibility would seem to be in official hands already. Why, then, it is incumbent on filers to determine their own eligibility and go to the trouble of filling out an application?

The rebate is available for single parents who earned $100,000 or less and for couples who make $200,000 or less. Households must file a 2021 federal income tax return to receive the benefit. The child tax rebate is supposed to deliver $125 million to families in the state.

Adding to the confusion is the federal child tax credit, which was expanded under the leadership of U.S. Rep. Rosa DeLauro, but only temporarily. That money came directly to families without a need to apply, but a plan to extend the expanded credit into future years has floundered in the U.S. Senate.

To demonstrate the benefit, half of the expanded federal credit was sent directly to families, which had the effect of reducing refunds come tax time (because the money had already been paid out). Whatever the intentions of the plan’s architects, this led to confusion.

And it’s now even more confusing, because plenty of filers with children don’t seem to know whether applying for the state tax credit will reduce their returns come next year’s tax season. But the answer is simple — if they don’t apply for the state tax credit, they won’t get the money.

There’s a reason why people dread filing their taxes, and it’s partly this — even well-intentioned plans that aim to put money in people’s pockets are needlessly confusing and add extra work for people who don’t have time for this sort of thing. If the state wants to give people money, it has better ways to do it.

It’s something both the state and federal governments must keep in mind going forward.

The state Department of Revenue Services’ website enables households to apply online. Applicants also can call the DRS at 860-297-5962. Anyone eligible is encouraged to do so.

Even well-intentioned plans that aim to put money in people’s pockets add extra work for people who don’t have time for this sort of thing. If the state wants to give people money, it has better ways to do it.