Rather than penalizing families for raising children, they invest in their young families through tax relief that acknowledges, and adjusts for, a household's increased costs when it is raising children. Many states specifically target relief to lower-income families. Ten states now have earned income tax credits. Each builds on the federal earned income tax credit, which has been cited as being the single best targeted tax measure to lift low-income families with children out of poverty. 28 states have a child and dependent care credit.
Credit is available only for cost of un subsidized child care.
This expansion is particularly helpful because housing is a great expense to Connecticut families raising children. At least 8 states have a refundable sales tax credit, to offset its regressivity. In some states the credit is taken against the income tax, and can be refunded if it exceeds income tax liability. In others, the credit is administered independently of the income tax. The size of the credit is commonly determined by household size rather than actual sales tax payments.