This week, researchers suggested that nearly one child benefiting from the Child Tax Credit (CTC) approved by Congress might be excluded.
Why is it important?
The CTC is a federal tax benefit designed to assist families with the expenses of raising kids. Starting in 2024, families can receive up to $2,000 for each qualifying child under 17, with a portion of that—$1,600—refundable. This means that families who don’t owe federal income tax can still get some money back.
Changes to the CTC are part of a significant piece of legislation backed by the Republican Party. This legislation, a cornerstone of President Donald Trump’s economic strategy, passed the House with a final vote on Thursday. Beginning in the 2025 tax year, the CTC will increase from $2,000 to $2,200 until it expires in 2028.
According to researchers at Columbia University, low-income parents and their children are unlikely to benefit from these changes.
What do you know
Megan A. Curran, the policy director at the Center for Poverty and Social Policy at Columbia University, mentioned that 28.3%—or about 19.3 million children—will not see this increase. These children are primarily from families that don’t earn enough to meet the new income threshold required for the higher credit.
Under the new rules, two-adult families must earn $41,500 to qualify for the $2,200 credit, as opposed to the current requirement of $36,000 for the full $2,000.
Curran expressed concern that this bill wouldn’t only fail to help families but could worsen conditions for children at risk of losing critical medical and food assistance.
While the CTC expansion in the bill seems significant, Curran noted its practical impact might be minimal. Since its establishment at $2,000 in 2017, she argued it has effectively lost value. “To keep pace with inflation, CTCs should be around $2,500 today for the same actual value,” she explained. “With the raise to $2,200, it’s actually less generous than the original $2,000.”
What will happen next
The increase in CTC is temporary and set to expire in 2028 unless lawmakers take further action. After that, it will revert to $2,000 and gradually adjust for inflation in the following years.
