Originally Published: February 28, 2018 6:06 a.m.
One year from now you may get more money back on your federal taxes, thanks to the tax reform Congress passed in December 2017, and Arizona stands to get about $250 million.
That is $250 million you and I will be paying, by the way, because Arizona’s taxes are figured differently than Uncle Sam’s system.
As the Courier reported previously, Arizona House Speaker J.D. Mesnard said this past month he does not want the state to get rich off taxpayers’ backs. Plenty other lawmakers think the state should keep the new-found wealth, such as for funding education or roads.
By all accounts, the state House began its effort Tuesday to tip that 2019 scale (from our 2018 taxes) back into our favor.
If you have children younger than 18, the state House wants to give you $250 for each one. We’re talking a tax credit, not a deduction.
Deductions are part of the difference between federal and state taxes; for example, if you take the $24,000 standard deduction on federal next year, you likely will still want to itemize deductions for your state taxes.
Still, after the deductions, we could end up paying more to the state.
But a tax credit, like those we pay at the end of each year to charities, reduces what you will owe when you pay your state income taxes.
Current law provides a $2,300 deduction from income for each dependent, but deductions are simply a subtraction from income. By contrast, an actual $250 per child credit is a subtraction of the actual taxes owed – on top of the deduction.
All of the tax math aside, the price tag for all of that is $96 million. Rep. Paul Mosley, R-Lake Havasu City, says the state can afford it.
“It won’t cost the state anything,” he said. “We have extra revenue coming in from the Trump tax bill.”
It may sound complex, but the state could make good on its promises.
As the legislation weaves its way toward the Senate – and then to the Governor – we can only hope. More money to offset raising our children could be one of the answers we are looking for.
— The Daily Courier