The Minnesota Child Tax Credit now featurse advanced payments; here’s what you need to know

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The Minnesota Child Tax Credit is in its second year, allowing families who qualify to receive up to $1,750 per child. 

The credit is fully refundable, which means families with children will still receive the money even if they don’t know owe any taxes. But they still have to file to get it. 

About 215,000 families received the credit last year, with the average family accessing about $1,244 per child.

Thanks to legislation passed last year, families no longer need to wait until tax time to start getting the credit. 

Beginning this year, families who claimed and received the Minnesota Child Tax Credit in 2024 can opt in to receive CTC advanced payments in 2025. 

These families can receive part of their CTC in three advance payments in August, October and December, allowing families to access consistent flexible cash during that time. 

This provides help for emergencies such as car problems and medical expenses and can also help families pay rent, and buy food and school supplies. 

We know these types of tax credits work to support families, evidenced by the success of the American Rescue Plan Act of 2021. When the Federal government provided advanced payments and increased the federal CTC, child poverty plunged, and recipients spent about half the credit on food. The next most common purchases included clothing, utilities and school supplies. 

This type of policy has proven to reduce child poverty; hopefully the Legislature will continue to support it. When families have access to flexible cash through tax credits like the CTC, they can reduce their family stress, which is better for everyone, especially children.

Although getting the Minnesota state CTC refund in a lump sum does not have a negative impact on public benefits, participation in the new advanced payments might lead to a decrease or loss of SNAP benefits. Any household currently enrolled in SNAP can contact the Minnesota Department of Children, Youth, and Families at 1-800-657-3698 with any questions. Families can also go online at the DCYF SNAP/CTC calculator to enter basic information around their current SNAP benefits to see how advance payments of the MN CTC could affect their benefit. 

Households must file by April 15th to access advanced payments of their Minnesota CTC. Volunteer Income Tax Assistance or AARP Tax-Aide can help you file your taxes. These sites help prepare federal and state income tax returns for free for those who qualify. 

Families can also screen themselves using Children’s Defense Fund Minnesota’s free screening tool Bridge to Benefits to understand if they are eligible for the Minnesota CTC, as well as get an estimated tax refund.