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LD 1294

An Act To Expand The Dependent Exemption Tax Credit

132nd Legislature (2025-2026) Introduced by Mattie Daughtry and 8 co-sponsors

Doubles the dependent exemption credit for under-6 children and phases out its refundability for higher incomes starting in 2025.

Died in Possession of the Senate when the Legislature adjourned Sine Die and was PLACED IN THE LEGISLATIVE FILES. (DEAD)
#credits #dependents #incometax
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Bill Summary · LD 1294

Summary — LD 1294: "An Act To Expand The Dependent Exemption Tax Credit"

Status: Carried over to any special or regular session of the 132nd Legislature (Joint Order SP 800). Introduced March 25, 2025. Passed both chambers as amended (Committee Amendment S‑389); placed on the Special Appropriations Table pending enactment.

Purpose

To increase tax support for families with very young children by expanding the dependent exemption tax credit for a child or dependent who has not attained age 6 by the end of the tax year, while limiting the refundable portion of that credit for higher‑income filers.

Key provisions

  • Doubles the dependent exemption tax credit for a child or dependent under age 6 (the bill text does not state the current dollar amount; it increases whatever the existing credit is by 2× for eligible dependents).
  • Phases out the refundability of the credit based on income thresholds. Refundability is reduced or eliminated for filers with income above:
    • $100,000 for single filers
    • $125,000 for head of household filers
    • $150,000 for married filing jointly or surviving spouse filers
  • Applies to tax years beginning on or after January 1, 2025.
  • Includes a one‑time General Fund appropriation to the Bureau of Revenue Services for computer programming changes required to implement the bill.

Who is affected

  • Primary beneficiaries: taxpayers with a qualifying child or dependent who is under 6 years old at year end (they receive a doubled credit).
  • Affected payers: higher‑income filers (above the thresholds) will see the refundable portion of the credit phased out, which may reduce refundable payments.
  • State and local governments: changes in refund payments and tax liabilities affect General Fund and Local Government Fund receipts.

Fiscal impact (from the committee fiscal note, LR 1681(02))

  • One‑time appropriation: General Fund $31,800 (FY 2025–26) to the Bureau of Revenue Services for programming.
  • Net General Fund effect:
    • FY 2025–26: net cost of $1,400 (revenue increase of $30,400 offset by $31,800 appropriation)
    • FY 2026–27: net revenue increase of $546,250
    • FY 2027–28: net revenue increase of $863,550
    • FY 2028–29: net revenue increase of $1,538,050
  • Local Government Fund (other special revenue) increases: $1,600 (FY 2025–26), $28,750 (FY 2026–27), with larger amounts in later years aligned to the General Fund increases.

Legislative/timing notes

  • Committee Amendment "A" (S‑389) was adopted; the bill passed both chambers (Senate vote 35–0; House vote Yeas 103 – Nays 40).
  • Effective for tax years beginning on or after January 1, 2025, if enacted.
  • As of June 25, 2025 the bill is carried over to any special or regular session of the 132nd Legislature and has not been finally enacted into law.

Compiled from official sources — confirm details with the bill’s official record.

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