New York distributing $350M as part of expanded child tax credit

(The Center Square) — New York is distributing $350 million in supplemental payments to low- and middle-income families under a beefed-up state tax credit program aimed at helping parents afford child care costs.

The expanded Empire State Child Credit program, a refundable tax credit for income-qualified New Yorkers with children, will provide checks to more than 1 million eligible families for up to $330 per child.

Gov. Kathy Hochul said the first round of payments are hitting mailboxes this week, with no application required, and will help to "address the cost of living for working parents" in the state.

"As New Yorkers get started with back-to-school shopping for their kids, we’re putting some money back in their pockets," Hochul, a Democrat, said in a statement.

The payments, which range from 25% to 100% of the tax credit received on filers' 2023 tax returns, are being delivered at a rate of over 100,000 checks per day, according to the Hochul administration.

Experts say the lack of child care options in New York is costing working families, some of whom spend 20% to 40% of their annual income on programs.

The average cost of child care is $15,394 a year in New York, the sixth-most expensive state in the nation, according to a 2023 report by the Economic Policy Institute. A typical family in New York would have to spend 39.8% of its income on child care for an infant and a 4-year-old, according to the report. Child care costs in New York City are even higher.

Many child care providers are financially strained in the wake of the COVID-19 pandemic, and advocates say low compensation and the rising costs of caring for children are putting some providers out of business.

Meanwhile, early education providers struggle to retain workers in an industry where the pay is traditionally low and health risks are elevated.

Hochul has touted a $1.8 billion state and federal investment in New York State’s Child Care Assistance Program approved as part of the fiscal year 2025 budget. That program covers more than 90% of market-rate child care costs for most eligible families, with some families paying no more than $15 per week per child.

Last year, Hochul and lawmakers expanded the Empire State Child Credit to include children under four, benefiting an estimated 600,000 additional children annually.

But Hochul clashed with fellow Democrats and child care advocates over a previous proposal that called for spending $5 billion for a universal child care system for all New York families, regardless of income or immigration status.