Pushed by Republican legislators and supported by President Donald Trump, the ambitious tax package known as “The One, Big, Beautiful Bill” was just signed by Trump. More than 40 million American families will benefit from the expansion of the Child Tax Credit (CTC), one of the most prominent basis of this law, which constitutes the biggest tax cut in the nation’s history.
With 218 votes in favor and 214 against, including two GOP congressmen who deviated from the party line, the House GOP passed President Donald Trump’s “One Big Beautiful Bill” in the US Congress. The bill, which is projected to have a big effect on regular Americans, is now signed by Trump.
In addition to raising security expenditure and enacting significant tax cuts, Trump’s tax and budget measure outlines specific cutbacks and breaks in federal support to Americans. Student loans and child tax credits are two major areas that Trump’s new policy would change.
Child Tax Credit in the Big Beautiful Bill
The New Child Tax Credit 2025 Amount will go up by 10%, from $2,000 to $2,200 per child. There are some restrictions, but President Trump’s flagship tax and spending bill will provide a increase to the well-liked child tax credit.
For each child under the age of 17 who is an American citizen or a qualified noncitizen, taxpayers who has an income as per Child Tax Credit 2025 Eligibility Requirements. The new law will increase the credit to a maximum of $2,200 for per child, the maximum credit would have returned to $1,000 if the bill hadn’t been received.
This 10% rise, however, comes after years of price increases that have reduced the value of original benefit. Also, a large number of children with extremely low incomes will not be able to receive any payments at all, including children of US citizens with undocumented parents.
How much will the Child Tax Credit increase?
The Child Tax Credit has been expanded to $2,200 per child with the signing of the Big Beautiful Bill, which expands and consolidates the temporary boost seen in earlier tax revisions. The previous credit was $2,000 per child, so this amount is a significant boost. More financial security for working families is also provided by the new credit’s permanent nature. Additionally, the necessity for a Social Security number is upheld to ensure that the benefit is only given to citizens and lawful residents.
Under President Trump’s Child Tax Credit in the Big Beautiful Bill will now be expanded. Experts have criticized the decision, claiming that the $200 increase is still too low because it was never changed to account for inflation when it was first proposed in 2018.
The child tax credit was notably raised during the epidemic to $3000 per child (and an extra $600 for younger children). However, as the pandemic subsided, the child tax credit was reinstated at $2,000, thus that change was only temporary.
Who is eligible for new CTC?
- Low- and middle-income households, particularly those making less than $100,000 annually, are intended to benefit from the new credit. The CTC will provide these families with an average tax deduction of USD 1300 and there will be a tax cut of up to 21% for families income between USD 15,000 and USD 30,000, which is the largest proportionate cut of any income bracket.
- The “additional child tax credit,” which is the refundable element of the child tax credit and may be worth up to $1,700, is available to taxpayers who make at least $2,500 each year. (A refund may be possible if a refundable tax credit reduces the tax burden to zero.) Although many more children live in low-income homes that make just enough to get a share of the benefit but not enough to receive the full payment, families making less than that do not receive any benefit.
- The left-leaning research group Tax Policy Center estimates that 17 million children cannot get the full child tax credit because of such income limits. For example, the Congressional Research Service found that the average benefit for taxpayers with children earning between $10,000 and $20,000 in 2022 was $800. Full-time employees who made the federal minimum wage are included in that pay range. In comparison, families with incomes between $200,000 and $500,000 received an average benefit of $2,810.
- The new rule would also exclude households with two illegal immigrants that do not have a Social Security number, including those whose children are US citizens and have a Social Security number.
The Bottom Line
The Big Beautiful Bill is focusing on helping working families, marking a dramatic change in American fiscal policy. While other policies aim to boost the family economy, the $200 increase in the Child Tax Credit provides direct help for millions of people.
This tax package is already creating good expectations among parents, workers, and small companies seeking greater security and buying power in a difficult economic situation, despite the ongoing political discussion.
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