How Trump’s child tax credit changes could impact your refund
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This tax season, some families may see a bigger tax break for their children due to changes made by President Donald Trump”big beautiful bill“
entered into force in July Trump’s legislation Permanently increased the maximum child tax credit per child from $2,000 to $2,200 for 2025. This value will be indexed to inflation starting from 2026.
If you previously qualified for the full $2,000 credit, the update could trigger a refund of $200 more per child or a tax bill of $200 less per child on your return in 2025, depending on your situation, experts say.
some in 2025 90 percent of families with children He received a child tax credit, and the average tax credit per family was $2,520, according to the Tax Policy Center.
Almost 37 million returns claimed the child tax credit or loan for other dependents through the 2022 tax year, according to the latest IRS estimates.
Here are some key things to know about the tax deduction, including who qualifies and how to calculate your credit.
Who is eligible for the child tax credit?
Families must meet certain rules to qualify for the child tax credit, including age, relationship, support, residency requirements and more.
Children must have a valid Social Security number and be under 17 by the end of 2025. If a married couple is applying jointly for the loan, one of the applicants must also have a Social Security number. IRS outline More instructions here.
Once income exceeds $200,000 for singles or $400,000 for married couples filing taxes jointly, the child tax credit begins to phase out or decrease.
“It’s not based on what you spend,” Margot Crandall-Hollick, chief research officer at the Urban-Brookings Tax Policy Center, told CNBC. “This depends on your earnings and whether you have a qualifying child.”
In contrast, another tax credit for families, known as the child and dependent care tax credit, partially reduces the cost of care for two or more “qualified individuals” (usually children under 13) by up to $6,000 when both tax-filing parents earn income jointly. Families with a single qualifying individual may seek reimbursement for up to $3,000 in care expenses.
How does the child tax credit work?
The maximum child tax credit for 2025 is up to $2,200 per child. If the credit exceeds the tax you owe, you can claim the “refundable” portion of up to $1,700 per child, known as the additional child tax credit, or ACTC. Many low-income filers owe no taxes.
“You get more benefits if you have a tax liability to offset the $500 difference,” said Tommy Lucas, a certified financial planner at Moisand Fitzgerald Tamayo in Orlando, Florida. His company ranks 69th in CNBC rankings 2025 Financial Advisor 100 list.
After the first $2,500 of earnings, the child tax credit is 15% of adjusted gross income, or AGI, until the tax credit reaches $2,200. ACTC, meanwhile, is capped at 15% of earnings over $2,500.
Minimum earnings of $2,500 and $1,700 refundable limit means millions of low-income families Will not receive the full $2,200 credit in 2026, according to a January analysis from the Center on Budget and Policy Priorities.
