Oregon legislature sends landmark Oregon Kids’ Credit to Governor

News Release
June 24, 2023

Oregon lawmakers have approved the creation of a state child tax credit to help low-income families with young children, and the bill now awaits the Governor’s signature. House Bill 3235, known as the “Oregon Kids’ Credit,” will begin delivering relief to families struggling the most with rising costs of living in early 2024.

“Oregon has taken a giant step toward ensuring that Oregon families living paycheck to paycheck get the extra support they need to raise their children,” said Alejandro Queral, Executive Director of the Oregon Center for Public Policy. “Establishing the Oregon Kids’ Credit is a significant victory for Oregon’s most vulnerable families.”

House Bill 3235 provides a fully refundable $1,000 tax credit for every child aged 0 to 5 to qualifying low-income families. Families earning up to $25,000 per year are eligible for the full credit, before eligibility phases out by $30,000. By supporting these families during a child’s critical developmental years, the Oregon Kids’ Credit aims to reduce economic disparities and ensure every child in Oregon has a strong foundation for life.

“The Oregon Kids’ Credit is a priority of the Oregon Legislative BIPOC Caucus. The data makes it clear this will help children of all races and ethnicities throughout our state, but especially Black and Brown, Indigenous, and Latinx children,” said Representative Andrea Valderrama (HD-47, Outer East Portland), who is a chief sponsor of the Oregon Kids’ Credit.

The Oregon Center for Public Policy has estimated nearly 55,000 children across the state stand to benefit from the Oregon Kids’ Credit, disproportionately children in rural communities.

“Child poverty is at the root of many issues we deal with in the legislature – housing insecurity, poor health and educational outcomes, and more. The Oregon Kids’ Credit will pull thousands of children out of poverty and improve the economic stability for tens of thousands of families in our communities,” added Representative Lisa Reynolds (HD-34, Northeast Washington County), also a chief sponsor of the legislation.

Highlighting the broad recognition of the importance of early childhood development and the need to support families facing financial challenges, HB 3235 garnered bipartisan support in both chambers. The Oregon Kids’ Credit passed 51 to 1 in the House and 24 to 1 in the Senate.

“The Oregon Kids’ Credit will address child poverty through an equitable tax credit that will ensure Oregon parents and families have the resources they need to pay for daily essentials like commuting to school and work, groceries, utilities, and childcare,” said Speaker Dan Rayfield (HD-16, Corvallis).

HB 3235 includes a provision that would direct the Oregon Department of Revenue to deliver a portion of a family’s tax credit in advance quarterly payments, better matching the credit to ongoing expenses. That provision would go into effect if the federal government declares that the quarterly payments would not count as income in determining eligibility for certain federal programs like food assistance.

“All Oregon children deserve to grow up economically secure,” said Ivy Major-McDowall, Policy and Advocacy Director at Our Children Oregon. “We know that investments that improve the economic stability of children in their early years have significant impacts on their well-being later in life.”

HB 3235 now heads to Governor Kotek’s desk for her signature.