The Benefits and Costs of a Connecticut Child Tax Credit

The Benefits and Costs of a Connecticut Child Tax Credit

This memo presents our estimates of the short and long-term benefits and costs of the proposed Connecticut Child Tax Credit for participants, taxpayers and the society as a whole. The analysis draws on the credit parameters proposed in the substitute for SB106 passed by the Connecticut General Assembly Children’s Committee in March 2026.

Key Findings

  • Connecticut is considering the establishment of a fully refundable state child tax credit worth up to $600 annually per qualifying child, capped at three children per tax unit, in families below $200,000 in household income.
  • An annual expenditure of $316 million on this credit would deliver $1.54 billion in short and long-term economic benefits to the state.
  • Every $1 spent each year on this child tax credit in Connecticut would generate nearly $5 in social and economic gains at the state level.
  • Economic gains are driven by the fact that the child tax credit would increase lifelong health, education, earnings, and future tax contributions of children and decrease costs for child protective services, for healthcare, and for victims of crimes and the criminal justice system. The credit would also lead to lifelong health improvement of parents.
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Suggested Citation:

Center on Poverty and Social Policy. 2026. The Benefits and Costs of a Connecticut Child Tax Credit. Columbia University.