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.
Some family tax credits, like the CTC and Adoption Tax Credit, were enhanced under President Donald Trump's so-called 'One Big Beautiful Bill.' That means some families could receive a bigger tax refund next year.
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Here’s what you need to know about key family tax credits in 2025 and how they've changed under the Trump administration’s newly enacted tax legislation.
1. Child Tax Credit increases in 2025
Trump's 'Big, Beautiful Bill' raises the federal child tax credit from $2,000 to $2,200 per qualifying child on your 2025 tax return. Without the measure, the maximum credit would have reverted to $1,000 in 2026.
- The maximum refundable portion is worth $1,700 in 2025. That’s the amount you can claim for tax returns you generally file in 2026.
- There's one caveat: To claim the CTC, the child and taxpayer (parent or guardian) must have a Social Security number.
For more information about the current child tax credit, see How Much is the Child Tax Credit for 2025?
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. Enhanced adoption tax credit in 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.
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.
Trump's megabill enhances the adoption tax credit by making it partially refundable and allowing parents to claim up to $5,000 in credits. The tax break is also indexed to inflation, with these changes effective after December 31, 2024.
Another provision allows 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.
4. Enhanced Child and Dependent Care Tax Credit
The Child and Dependent Care Tax Credit (CDCT), for example, has remained unchanged for more than ten years. That is until the Trump administration enhanced the tax break under the newly enacted OBBB.
Trump’s megabill permanently increases the amount of the child and dependent care tax credit from 35% to 50% for qualifying expenses. Additionally, the credit rate phases down for taxpayers with an adjusted gross income (AGI) over $15,000.
- The credit amount will be reduced by 1% (but now below 35%) for each $2,000 that the taxpayer’s AGI exceeds $15,000.
- The credit will be reduced by 1% (but not below 20%) for each $2,000 ($4,000 for joint returns) that an AGI surpasses $75,000 ($150,000 for married filing jointly).
- The amendment is effective for taxable years after December 31, 2025.
For taxes typically filed in early 2026, the child and dependent care tax credit is as follows.
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.
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
President Donald Trump’s "One Big Beautiful" was signed into law on July 4, 2025, and includes a handful of changes that impact key tax credits that help families with children thrive.
While some provisions enhance existing credits, others introduce new barriers that will prevent certain individuals from claiming benefits they were previously 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.
Related
- Child Tax Credit: How Much Is It for 2025?
- States That Offer a Child Tax Credit
- The Earned Income Tax Credit for 2025
- Adoption Tax Credit: What You Need to Know
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