Special Reports: Tax Talk

The 2011 Tax Increases Impact on the Child Tax Credit in Oklahoma

On the 2010 tax return, millions of American parents and guardians will be eligible to receive up to a $1000 tax credit for each dependent, qualifying child. A qualifying child is a son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any who was under age 17 at the end of 2010 and did not provide for over half of his or her own support in 2010, who lived with the guardian for more than half of 2010, who is claimed as a dependant on the guardians return and who is a US citizen, a US national, or a US resident alien. This credit provides much needed tax relief to parents and guardians who see their expenses dramatically increased by the additional resources needed to care for a child.

However, beginning January 1, 2011, that tax credit will be cut in half unless something is done in Congress to stop the 2001 and 2003 tax cuts from expiring. And that will have a major impact on Oklahoma families. In 2007 in Oklahoma, 316,133 child tax credits were taken. If that number stays consistent – although it is surely to increase by 2011 as Oklahoma's population continues to rise – Oklahomans would see their taxes increase an astonishing $158,066,500 with just this one expiring tax credit.

And as much as some of my colleagues from across the aisle like to say that these tax increases are only a "tax on the wealthy," more than half of these tax credits were taken by Oklahoman individuals and families earning less than $50,000. This means failure to extend these tax credits would really mean raising the tax burden on even the poorest of American families during one of the worst economic recessions in a generation. Congress and the White House must push beyond partisan rhetoric and work together to permanently extend these important tax cuts before they expire this year.

Next week on "Tax Talk," I will discuss the reinstatement of the marriage penalty – an unfair tax on married couples – and how it will affect Oklahomans. If you would like to keep up with the special report, I encourage you to visit my website at www.house.gov/lucas and select "Special Report: Tax Talk."

 

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