§ 47–1806.17. Child tax credit.

(a) For taxable years beginning after December 31, 2024, there shall be allowed a credit against the tax imposed by this chapter for each qualifying child of the taxpayer for which the taxpayer is allowed a deduction under section 151 of the Internal Revenue Code of 1986.

(b)(1) The amount of the credit shall be calculated as follows:

(A) For the taxable year beginning January 1, 2025, $420 for each qualifying child who has not reached the age of 6 years by December 31, 2025, up to a maximum of 3 qualifying children; and

(B) For taxable years beginning after December 31, 2025, $420 for each qualifying child who has not reached the age of 6 years by December 31 of the taxable year, up to a maximum of 3 qualifying children, increased annually pursuant to the cost-of-living adjustment (if the adjustment does not result in a multiple of $5, rounded down to the next multiple of $5).

(2) The amount of the credit shall be reduced by $20 for each $1,000 (or fraction thereof) by which the taxpayer's adjusted gross income exceeds the threshold amount; except, that the reductions cannot reduce the credit below zero.

(3) In the case of a return made for a fractional part of a taxable year, the credit allowable under this section shall be reduced to an amount that bears the same ratio to the full credit provided as the number of months in the period for which the return is made to 12 months.

(c) The credit claimed under this section in a taxable year may exceed the taxpayer's tax liability under this subchapter for that taxable year and shall be refundable to the taxpayer claiming the credit. Any refunds paid to the taxpayer pursuant to this section shall not be considered income for the purpose of determining eligibility for or benefit amount of public assistance.

(d) Notwithstanding any other provision of this section, a taxpayer shall not be eligible to receive a credit if:

(1) The taxpayer does not claim the qualifying child as a dependent on the taxpayer's federal and District income tax returns for that taxable year; or

(2) The taxpayer was not a resident of the District for the entire calendar year preceding the year in which a claim for this credit is filed.

(e) For the purposes of this section, the term:

(1) "Base year" means the calendar year beginning January 1, 2025, or the calendar year beginning one calendar year before the calendar year in which the new dollar amount of the credit amount or eligibility income threshold amount shall become effective, whichever is later.

(2) "Consumer Price Index" means the average of the Consumer Price Index for All Urban Consumers for the Washington-Arlington-Alexandria, DC-MD-VA-WV Metropolitan Statistical Area (or such successor metropolitan statistical area that includes the District), or any successor index, as of the close of the 12-month period ending on July 31 of such calendar year.

(3) "Cost-of-living adjustment" means an amount, for any calendar year, equal to a dollar amount set forth in this section multiplied by the difference between the Consumer Price Index for the preceding calendar year and the Consumer Price Index for the base year, divided by the Consumer Price Index for the base year.

(4) "Dependent" shall have the same meaning under section 152 of the Internal Revenue Code of 1986.

(5) "Threshold amount" means the adjusted gross income reported on the taxpayer's return in the following amounts:

(A) For the taxable year beginning January 1, 2025:

(i) $160,000 in the case of an unmarried individual filing as single, head of household, or qualifying widow(er);

(ii) $240,000 in the case of married individuals or registered domestic partners filing either jointly or separately on a combined return; or

(iii) $120,000 in the case of an individual filing as married filing separately.

(B) For taxable years beginning after December 31, 2025, increased annually pursuant to the cost-of-living adjustment (if the adjustment does not result in a multiple of $100, rounded down to the next multiple of $100):

(i) $160,000 in the case of an unmarried individual filing as single, head of household, or qualifying widow(er);

(ii) $240,000 in the case of married individuals or registered domestic partners filing either jointly or separately on a combined return; or

(iii) $120,000 in the case of an individual filing as married filing separately.

(6) "Qualifying child" shall have the same meaning as under section 24(c)(1) of the Internal Revenue Code of 1986.