On July 4, 2025, President Donald Trump signed the GOP's long-anticipated tax cuts and spending package, and it includes changes to the federal child tax credit (CTC).
At the centerpiece of the legislative tax proposal known as the “One Big Beautiful Bill (OBBB) makes Trump’s 2017 Tax Cuts and Jobs Act (TCJA) permanent. The bill also increases the CTC from its current top rate of $2,000 to $2,200 starting this year, in 2025. Recipients must have a Social Security number.
Also, the maximum amount of the refundable portion of the child tax credit wouldn't exceed $1,400 per qualifying child, subject to inflation.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The TCJA previously raised the CTC temporarily from $1,000 per child to $2,000 through 2025. For the 2024 tax year (returns just filed in April), eligible families could receive a refundable credit worth up to $1,700.
Here’s more of what you need to know.
New CTC amounts for 2025
The newly enacted "One Big Beautiful Bill" increases the child tax credit to $2,200 starting in 2025. As mentioned, the measure indexes the amount of inflation starting next year.
Claimants must have a Social Security number to qualify. Additionally, the maximum refundable portion of the CTC is $1,400 (indexed to inflation).
New child tax credit limits accessibility
What does the Social Security Number (SSN) requirement look like for mixed-status households?
Currently, the CTC is available for dependent children if the children are U.S. citizens, regardless of the parents' citizenship status. This includes lawful residents and undocumented immigrants.
The new rule requires that taxpayers (and their spouses, if married and filing jointly) have their work-eligible SSN to claim the CTC. In other words, if one parent doesn't have an SSN, the family won't be able to claim the federal child tax credit.
The Center for Migration Studies estimates that over 4.5 million children, the majority of whom are citizens, would no longer be eligible for the credit under the OBBB.
- This means that nearly 1 million children in California could no longer be eligible for the federal CTC due to one parent lacking a Social Security Number.
- In Texas, some 875,000 children could also be blocked from receiving the credit.
- In Florida, an estimated 247,000 children would be ineligible for the CTC.
Previous child tax credit amount
Before the OBBB, eligible families could claim a federal child tax credit worth up to $2,000 per child under age 17. If the credit surpassesed your tax liability, you could receive some or all the difference as a refundable credit.
- The refundable portion of the CTC (known as the Additional Child Tax Credit or ACTC) was worth 15% of a family’s earnings above $2,500, up to a maximum of $1,700 per child for tax year 2024.
- The credit phased down once a household income surpasses $200,000 for single parents or $400,000 for married couples.
Additionally, the 2017 TCJA (Trump's first set of tax cuts) included a $500 nonrefundable credit for families with older children and adult dependents, which was subject to the same CTC phased-out rules. That is known as the “Other Dependent Tax Credit” or ODCT.
Leaving low-income children out
While tax package increases the value of the child tax credit above $2,200 per child, tax policy analysts warn that millions of children are forgotten.
The failure to make changes to the structure of the credit would “largely leave low-income children out,” according to an analysis by the Tax Policy Center. Some 17 million children, or one in four, would continue to receive less than the full tax credit or no credit at all due to their family's income.
Families that earn less than $2,500 effectively receive no credit under the CTC. If a family owes little or no federal income tax, the nonrefundable credit might not benefit them. (At that income level, it only reduces tax liability to zero and doesn’t generate a refund.)
The current structure of the credit phases in at a rate of 15 cents for each dollar, regardless of the number of qualifying children in the family.
Child tax credit increase: Bottom line
As the Republican-led Congress moves forward with implementing their tax plan, advocates of the CTC, like Robert Greenstein, founder and former president of the Center on Budget and Policy Priorities (CBPP), warn that there are still ways to improve the child tax credit framework.
“Depending on how such changes are crafted, they could either help children in lower-income working families or bypass them while favoring children in families higher on the income scale, with incomes of up to half a million dollars a year,” wrote Greenstein for the Brookings Institution.
Stay tuned to our coverage to see how those changes will impact you and your family.
Related
- Child Tax Credit: How Much Is It for 2025?
- States That Offer a Child Tax Credit
- Trump’s ‘One Big, Beautiful Bill’ With Trillions in Tax Cuts: GOP Plan Revealed
- Three Major 2025 Tax Changes for Parents in 'Big Beautiful Bill'
-
IRS Updates Capital Gains Tax Thresholds for 2026: Here’s What’s NewCapital Gains The IRS has increased the capital gains tax income thresholds for 2026. You'll need this information to help minimize your tax burden.
-
Are You Outsourcing Taxes? Here’s the Age ‘Most Americans’ Hire a Tax ProfessionalTax Tips Taxpayers may outsource their financial stress by a specific age. Find out when you should hire a tax preparer.
-
The Original Property Tax Hack: Avoiding The ‘Window Tax’Property Taxes Here’s how homeowners can challenge their home assessment and potentially reduce their property taxes — with a little lesson from history.
-
Social Security Tax Limit Rises Again: Who Pays More in 2026?Payroll Taxes The Social Security Administration has announced significant changes affecting millions as we approach a new year.
-
Three Critical Tax Changes Could Boost Your Paycheck in 2026Tax Tips The IRS predicts these tax breaks may change take-home pay in 2026. Will you get over $1,000 in tax savings?
-
Trump’s 2025 Tax Bill: What’s Changing and How It Affects Your TaxesTax Law From standard deduction amounts to tax brackets and Medicaid cuts, here’s what individual filers need to know about tax changes in Trump's so called "big beautiful bill."
-
RMDs, Roth, and SS: Test Your Knowledge of Retirement Tax RulesQuiz Don't let the IRS catch you off guard. Take our quiz to reveal common retirement tax rules that could save (or cost) you thousands.
-
What’s the New 2026 Estate Tax Exemption Amount?Estate Tax The IRS just increased the exemption as we enter into a promising tax year for estates and inheritances.
-
IRS Updates 2026 Tax Deduction for People Age 65 and OlderTax Changes Adjustments to the extra standard deduction can impact the tax bills of millions of older adults. Here are some new amounts to know for 2026.
-
IRS Reveals New 2026 Child Tax Credit and other Family Credit AmountsTax Credits Key family tax breaks are higher for 2026, including the Earned Income Tax Credit and the Adoption Credit. Here's what they're worth.
