The children’s tax credit could be worth more than $ 2,000 in the Republican spending plan – but millions of families would not benefit

The room and the Senate Versions of the budget reconciliation bill Include an increase in children’s tax credit, but the version of the house gives the families a greater payment.

THE Children’s tax credit is a partially refundable tax credit available for taxpayers with children or dependents under 17 years of age. Parents and tutors earning $ 200,000 per year or less are eligible to claim full credit of $ 2,000 per child during the 2025 taxation year. Without new legislation, this limit will return to $ 1000 per child qualifying after the expiration of the tax on tax reductions and 2017 jobs in 2025.

The congress is trying to increase the maximum amount of credit thanks to its budget reconciliation process, but the rooms differ on maximum amounts offered. The chamber proposal would increase the maximum credit to $ 2,500 per child, while the Senate version provides up to $ 2,200 per eligible dependence.

As part of the room plan, the limit of $ 2,500 would remain in place until 2028, then dropped to around $ 2,100 and would be indexed for inflation in the following years, according to the Tax policy. The Senate plan would also adjust the maximum credit amount for inflation after 2026. The two proposals would retain the maximum repayable part of the credit at $ 1,700.

Whatever the latest maximum credit figure of the bill, around 17 million children would still not qualify for the entire service, according to an analysis of the Center on budget and political priorities.

This is because the children’s tax credit is not fully refundable. Since 2025, families who do not owe income tax and earn less than $ 2,500 cannot claim any part of the children’s tax credit. Those who earn more than $ 2,500 can be eligible for additional children’s tax credit – the refundable credit part of a value of up to $ 1,700. Families with income of more than $ 2,500 can receive up to $ 1,700 in reimbursement if the rest of the children’s tax credit covers their tax obligation.

About 2 million children are currently eligible for any of the children’s tax credits because their families earn less than $ 2,500, according to the Tax policy. Additional 15 million receives it, but not full credit, because their families earn more than $ 2,500, but not enough for their income taxes to exceed the amount that allows them to claim full credit.

New and continuous restrictions on which can claim the children’s tax credit

The proposals of the Senate and the Chamber for the Children’s Tax Credit would continue a restriction introduced in 2018 which obliges children to have social security numbers so that their families can claim the credit. About 1 million children lost their eligibility when this rule entered into force in 2018, according to the Policy Center tax.

The proposal of the Chamber would also oblige both parents to have social security numbers to claim the advantage, while the Senate’s proposal would only ask for a parent.

Currently, married couples that deposit separately can always claim the children’s tax credit for children and eligible dependents, but the proposal of the Chamber would end this eligibility while the Senate plan would keep it in place.

The number of children with SSNs who do not receive the maximum children’s tax credit would drop from 17 million to more than 26 million under the chamber proposal, according to estimates by the FISM Policy Center.

The proposal is currently in the air with contradictory reports on the question of whether the Senate republicans have the necessary support To adopt the bill as is. President Donald Trump pushes the bill Sent to his office by July 4that the head of the majority of the Senate John Thune (Rs.d.) said it will happen.