Given Hawaiʻi’s rising cost of living and the corresponding increase in child poverty, lawmakers should seize the opportunity this legislative session to establish a state-level Child Tax Credit (CTC)—or “Keiki Credit”—to provide necessary tax relief for low- to middle-income families with children.

At the moment, two companion bills are being considered by the Hawaiʻi Legislature to create a keiki credit. House Bill 1662 and Senate Bill 2660 would give households earning less than $115,000 annually a tax refund of up to $650 per child under the age of 18.

Talking Points

1. Since 1997, the federal CTC has been a lifeline for working families. The American Rescue Plan Act of 2021 expanded the federal CTC, lifting an additional 2.9 million children across the U.S. out of poverty. When the federal expansion expired at the end of 2021, the national child poverty rate more than doubled.

2. With the end of the federal CTC expansion, child poverty rates have soared back up to their pre-pandemic levels. Recognizing this gap in assistance, 14 states have adopted their own CTCs to complement the federal CTC.

3. Research shows that children raised in financially stable households have better educational outcomes, improved health, and higher incomes later in life. In this way, the CTC prevents children from falling into poverty to begin with, and its benefits are felt across multiple generations.

4. Some 176,000 children in Hawaiʻi would benefit from the proposed keiki credit, with most of the benefits going to those in lower-income families. This tax relief would bring Hawaii’s working families closer to the financial security they deserve.