Millions of working families rely on family tax credits like the child tax credit (CTC) to support household bills like food, housing, child care, and education.
Claiming these and other federal tax credits and deductions, like the adoption credit and the Earned Income Tax Credit (EITC), can lower your tax liability or increase your refund amount.
In the news: Some family tax credits, like the CTC and EITC, may change under provisions penned by GOP lawmakers as part of their version of Trump’s comprehensive tax and spending cuts megabill. The partisan measure passed the House floor in May and will likely face revisions in the Senate before any final legislation is passed.
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For now, the IRS announced the 2025 tax year amounts for these popular credits that you'll use for returns normally filed in early 2026. Here's what you need to know.
1. Child tax credit 2025
For the 2025 tax year, the IRS announced that the refundable portion of the CTC is $1,700. That’s the amount you can claim for tax returns you generally file in 2026.
For the 2024 tax year (returns typically filed in early 2025), the refundable portion of the credit is also $1,700. For more information about the current child tax credit, see How Much is the Child Tax Credit for 2025?
Potential reforms to the CTC: Republican lawmakers aim to increase the federal Child Tax Credit from $1,000 to $2,500 through 2028, and set the credit to $2,000 for subsequent tax years. The draft legislation, which may face changes inat the Senate, would add a requirement for recipients to have a Social Security number.
For more details: Here’s How the Child Tax Credit Could Increase Under Trump
Also, your family could be eligible for a state child tax credit. Currently, fifteen states plus the District of Columbia provide their version of the child tax credit.
2. Adoption tax credit 2025
The federal adoption tax credit for the 2025 tax year (taxes generally filed in 2026) is worth up to $17,280 (up from $16,810 for 2024).
The tax benefits for adoption include a tax credit for qualified adoption expenses paid to adopt a child and an exclusion from income for employer-provided adoption assistance.
Most importantly, the credit is nonrefundable, meaning it’s limited to your tax liability for the year. Any amount that exceeds your tax liability can be carried forward for up to five years, and the amount is adjusted for inflation every year.
The amount you can claim will depend on your modified adjusted gross income (MAGI).
- For the 2025 tax year, the credit phase-out begins at $259,190 and phases out completely at $299,190 or above.
- Keep in mind, that there are some limitations, including a special needs exception.
Potential reforms to the adoption tax credit: Republican lawmakers aim to enhance the adoption tax credit in their version of Trump’s ‘big, beautiful’ bill. The provision would make the tax break fully refundable and index it to inflation, allowing parents to claim up to $5,000 in credits. Another provision would allow Indian tribal governments to determine if a child has special needs for the adoption credit.
For more information, see Kiplinger's report: Adoption Tax Credit: What You Need to Know.
3. Earned Income Tax Credit (EITC) 2025
The Earned Income Tax Credit is a refundable tax credit that is available for people with an earned income below a certain threshold.
How much you get will depend on your filing status, the number of qualifying children in your household, and earned income.
- For 2025 (returns you typically file in 2026) the credit is worth up to $8,046 (up from $7,830 for 2024) with three qualifying children
- For those with two qualifying children, the credit is worth up to $7,152 (up from $6,960)
- If you have one qualifying child, the credit is worth up to $4,328 (up from $4,213)
- Those with no qualifying children can get up to $649 (up from $632)
Additionally, for taxable years beginning in 2025, you won't be eligible for the EITC if your investment income exceeds $11,950.
Here are the income phaseout amounts for claiming the EITC for tax year 2025 (typically filed in 2026).
Number of children or relatives claimed | Married filing jointly Phase-in Amount | Married filing jointly Phase-out Amount | Earned Income Amount | Maximum Amount of Credit |
Zero | $17,730 | $26,214 | $8,490 | $649 |
One | $30,470 | $57,554 | $12,730 | $4,328 |
Two | $30,470 | $64,430 | $17,880 | $7,152 |
Three or more | $30,470 | $68,675 | $17,880 | $8,046 |
| Row 5 - Cell 0 | Row 5 - Cell 1 | Row 5 - Cell 2 | Row 5 - Cell 3 | Row 5 - Cell 4 |
| Row 6 - Cell 0 | Row 6 - Cell 1 | Row 6 - Cell 2 | Row 6 - Cell 3 | Row 6 - Cell 4 |
Number of children or relatives claimed | All other filers Phase-in Amount | All other filers Phase-out Amount | Earned Income Amount | Maximum Amount of Credit |
Zero | $10,620 | $19,104 | $8,490 | $649 |
One | $23,350 | $50,434 | $12,730 | $4,328 |
Two | $23,350 | $57,310 | $17,880 | $7,152 |
Three or more | $23,350 | $61,555 | $17,880 | $8,046 |
You may also be eligible for an earned income credit on your state tax return. Some states and the District of Columbia, and New York City offer versions of the earned income credit.
Potential reforms to EITC: Republican lawmakers included a provision in their draft legislation for Trump’s tax cuts and spending bill that would create a new certification program for the Earned Income Tax Credit. If enacted into law, this program would determine a child’s qualifying status and address duplicate claims. It would also create a Treasury task force to address improper payments and administrative issues.
4. Child and Dependent Care Tax Credit
The Child and Dependent Care Tax Credit (CDCT), for example, has remained unchanged for more than ten years. The maximum expense that can be used to calculate your credit amount is $3,000 (for one qualifying person) or $6,000 (for two or more eligible persons). The credit amount is also based on the percentage (20% to 35%) applied to your adjusted gross income.
Under current law, the credits are non-refundable, and families are eligible for the following:
- 35% for taxpayers with adjusted gross income between $0 and $15,000
- 20% to 35% for taxpayers earning between $15,000 and $43,000
- 20% for those earning over $43,000 annually
What comes next for family tax credits
Temporary expansions to the CTC are slated to expire as of 2026 unless Congress acts soon. As reported by Kiplinger, these changes will mean many families will get fewer tax credits, and fewer children will be eligible.
Republican lawmakers have penned provisions in their version of Trump’s ‘One Big Beautiful Act’ that may impact several of these key tax credits that help families with children thrive. While some propose enhancements to existing credits, others also feature new barriers that could block certain individuals from claiming benefits they were once eligible for.
With family tax credits as a pocketbook issue at the federal and state levels, it’s important to stay informed about changes that can directly impact your household’s financial well-being.
The measure is now on the Senate floor and is likely to face revisions before heading for a vote. So, stay tuned to see if they could change next year.
Related Content:
- Child Tax Credit: How Much Is It for 2024 and 2025?
- States That Offer a Child Tax Credit
- The Earned Income Tax Credit for 2024 and 2025
- Adoption Tax Credit: What You Need to Know
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