Idaho Child Tax Credit set to expire this year

BOISE (Idaho Capital Sun) — In the moments before the 2025 Idaho legislative session came to a close Friday, Republican legislative leaders called a press conference where they heralded the combined passage of more than $400 million worth of tax cuts this year.

The cuts reduce the income tax rates Idahoans and businesses pay, shift money to a state fund used to to reduce property taxes, shift money to another state fund to pay down public school bond issues and levies that are paid for by property taxes and increase the grocery tax credit that is used to offset $155 worth of sales tax Idahoans pay on food.

House Speaker Mike Moyle, R-Star, said the overall downward trend is good for the state.

But at the end of this year a different tax credit that has benefited Idaho families for seven years is set to expire with much less fanfare than the new cuts.

Before Jan. 1, the Idaho Child Tax Credit will expire. Passed by the 2018 Idaho Legislature – and co-sponsored by Moyle – the Idaho Child Tax Credit provides a $205 nonrefundable tax credit for each taxpayer’s child under age 17.

The Idaho Child Tax Credit law was written so that it would be in effect from Jan. 1, 2018 to before Jan. 1, 2026, and the Idaho Legislature did not extend it before adjourning the 2025 legislative session for the year.

Although the new 2025 tax cuts are making headlines this week, analysts with the nonpartisan Idaho Center for Fiscal Policy said many Idaho families who don’t own property won’t experience overall tax relief this year because of the expiration of the Idaho Child Tax Credit.

When taken into consideration with House Bill 40 and House Bill 231, Idaho families earning between $31,100 and $146,000 annually won’t see any tax benefit, the Idaho Center For Fiscal Policy said in a report on its website. Idaho families making between $55,600 and $91,800 should expect to see an overall tax increase of about $100, the center wrote.

“Idaho lawmakers have made significant cuts to the state’s income tax to provide tax relief to Idahoans this year, but with the expiration of our state Child Tax Credit, most families won’t experience any tax relief,” May Roberts, a policy analyst at the Idaho Center for Fiscal Policy, wrote in a statement. 

Roberts said Idaho legislators could have taken action to ensure low and middle class families aren’t left behind by renewing the Idaho Child Tax Credit, incorporating an income cap, and making the credit refundable. 

For Idaho homeowners and property owners, House Bill 304 provides an additional $100 million in state revenue meant to reduce property taxes and pay down school bonds and levies, which was not included in the Idaho Center For Fiscal Policy reports.

Expiration of Idaho Child Tax Credit shows shifting priorities for Idaho legislators

The 2018 Idaho Legislature created the Idaho Child Tax Credit through the income tax conformity bill House Bill 463, and then came back and expanded the amount of the credit to $205 per child through House Bill 675 that same year.

The Idaho House of Representatives voted unanimously to pass House Bill 675, which included legislative intent language spelling out the Idaho Legislature’s priorities. The language says that it is the Idaho Legislature’s intent to take an anticipated increase in sales tax revenues collections stemming from a new law collecting Idaho sales tax from out-of-state retailers, and apply toward income tax relief for Idaho families. 

But, now seven years later, the Idaho Legislature’s intent appears to have changed.

During a press conference Friday, Moyle told the Sun legislators that the expiration of the Idaho Child Tax Credit was brought up this year, but legislators chose to focus on cutting taxes in other areas.

“I think we were more focused on tax relief for everybody with the income (tax) that covered everybody, the property (tax) that covered everybody and the schools and the sales tax,” Moyle said. “So we were more focused on those areas that touched everybody.”

House Majority Leader Jason Monks, R-Meridian, agreed with Moyle.

“We knew about it, it was coming up, but we had other priorities,” Monks said. “As the speaker mentioned, we were going to address those big issues that we’ve been hearing from our constituents and from the people of Idaho to address. They want property tax relief and they want tax relief, and that’s what we provided for them.”

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