SB 1144 increases the state dependent tax credit to $700 per dependent beginning with the 2026 taxable year and sunsets after five years.
The current dependent tax credit was established in 1999 and is $475 for the 2025 taxable year after inflation adjustments.
“Raising a child in California is significantly more expensive than in other states,” said Sen. Valladares. “Housing, childcare, healthcare, and education costs continue to climb. Increasing the dependent tax credit would provide real relief for working families who need it the most.”
The temporary five-year increase ensures immediate relief while allowing the Legislature to evaluate long-term fiscal impacts.