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House Republicans’ child tax credit plan
The Tax Cuts and Jobs Act, or TCJA, of 2017, temporarily boosted the maximum child tax credit to $2,000 from $1,000, an increase that will expire after 2025 without action from Congress.
If enacted, the House bill would make the $2,000 credit permanent and raise the cap to $2,500 from 2025 through 2028. After 2028, the credit’s highest value would revert to $2,000, and be indexed for inflation.
However, the plan does “nothing for the 17 million children that are left out of the current $2,000 credit,” said Kris Cox, director of federal tax policy with the Center on Budget and Policy Priorities’ federal fiscal policy division.
Typically, very low-income families with kids don’t owe federal taxes, which means they can’t claim the full child tax credit.
Plus, under the House proposal, both parents must have a Social Security number if filing jointly and claiming the tax break for an eligible child.
“This bill is taking the child tax credit away from 4.5 million children who are U.S. citizens or lawfully present,” Cox said.
How the 2025 child tax credit works
For 2025, the child tax credit is worth up to $2,000 per qualifying child under age 17 with a valid Social Security number. Up to $1,700 is “refundable” for 2025, which delivers a maximum of $1,700 once the credit exceeds taxes owed.
After your first $2,500 of earnings, the child tax credit value is 15% of adjusted gross income, or AGI, until the tax break reaches that peak of $2,000 per child. The tax break starts to phase out once AGI exceeds $400,000 for married couples filing together or $200,000 for all other taxpayers.
“Almost everyone gets it,” but middle-income families currently see the biggest benefit, said Elaine Maag, senior fellow in the Urban-Brookings Tax Policy Center.
A bipartisan House bill passed in February 2024 aimed to expand access to the child tax credit and retroactively boosted the refundable portion for 2023, which would have impacted families during the 2024 filing season.
The bill failed in the Senate in August, but Republicans expressed interest in revisiting the issue.
At the time of the vote, Sen. Mike Crapo, R-Idaho, described it as a “blatant attempt to score political points.” Crapo, who is now chairman of the Senate Finance Committee, said in August that Senate Republicans have concerns about the policy, but are willing to negotiate a “child tax credit solution that a majority of Republicans can support.”
Although House Republicans previously supported the expansion for lower-earners, the current plan “shifts directions and focuses the benefits on middle and high-income families,” Maag said.