FISCAL NOTE
Date Requested: February 03, 2026
Time Requested: 04:35 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3373 |
Introduced |
HB5084 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
General Revenue Fund
Sources of Revenue:
General Fund
Legislation creates:
Decreases Existing Revenue, Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to repeal the non-refundable child tax credit and create and authorize a refundable child tax credit.
Per our interpretation, the bill would repeal the current “Child and dependent care credit” under W.Va. Code §11-21-26 and create a child tax credit. The bill authorizes a refundable personal income tax credit for residents who are allowed a federal child tax credit for an eligible child on their federal return. The amount of the credit is $1,000 per eligible child. The federal credit allowed can be for either the Federal “Child and other Dependent tax credit” or “Additional child credit.”
The bill, if passed, would be effective for tax years beginning on and after January 1, 2026.
According to our interpretation, the proposed legislation would decrease General Revenue Fund collections by up to $297 million in FY2027 and in subsequent fiscal years.
Additional administrative costs incurred by the State Tax Department would be $46,150 in FY2027 and $22,500 in subsequent fiscal years.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2026
Increase/Decrease
(use"-") |
2027
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
46,150 |
22,500 |
| Personal Services |
0 |
22,500 |
22,500 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
1,650 |
0 |
| Other |
0 |
22,000 |
0 |
| 2. Estimated Total Revenues |
0 |
-297,000,000 |
-297,000,000 |
Explanation of above estimates (including long-range effect):
Per our interpretation, the bill would repeal the current “Child and dependent care credit” under W.Va. Code §11-21-26 and create a child tax credit. The bill authorizes a refundable personal income tax credit for residents who are allowed a federal child tax credit for an eligible child on their federal return. The amount of the credit is $1,000 per eligible child. The federal credit allowed can be for either the Federal “Child and other Dependent tax credit” or “Additional child credit.”
The bill, if passed, would be effective for tax years beginning on and after January 1, 2026.
According to our interpretation, the proposed legislation would decrease General Revenue Fund collections by up to $297 million in FY2027 and in subsequent fiscal years.
Additional administrative costs incurred by the State Tax Department would be $46,150 in FY2027 and $22,500 in subsequent fiscal years
Memorandum
The stated purpose of this bill is to repeal the non-refundable child tax credit and create and authorize a refundable child tax credit.
This bill purports to provide a $1,000 refundable credit for those resident individuals “claiming” the federal child tax credit of section 24 of the internal revenue code. The use of “claims the credit” rather than “allowed [the credit]” is problematic. A taxpayer may claim a federal credit but not be entitled to it or they may “claim” the credit only to have it ultimately disallowed.
The title of the bill states, “…authoring a refundable child or childcare tax credit.” However, the bill only creates a “child tax credit.”
The language of the bill is vague as to whether it is creating a $1,000 “per eligible child” credit or a $1,000 “per taxpayer” credit. If the credit is to align with the federal child tax credit and be a credit for “each qualifying child,” the language “each eligible child” should be considered. [“eligible child” =” qualifying child” per the bill’s definition of “eligible child.”]
Person submitting Fiscal Note: Mark Muchow
Email Address: RADfiscal@wv.gov