Child Tax Credit Warning: Millions of Children Could Be Ineligible

Newsweek

04-07-2025

Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources.
Almost one in three children could be left out of the boosted Child Tax Credit (CTC) approved by Congress this week, researchers said.
Why It Matters
The CTC is a federal tax benefit aimed at helping families offset the cost of raising children. As of 2024, the credit provides up to $2,000 per qualifying child under the age of 17, with up to $1,600 of that amount refundable. This means eligible families can receive a portion of the credit as a refund even if they owe no federal income tax.
Changes to the CTC are embedded in the Republican One Big Beautiful Bill Act. The sprawling megabill, the bedrock of President Donald Trump's fiscal agenda, passed its final vote in the House on Thursday. Beginning in the 2025 tax year, the CTC will rise from its current $2,000 to $2,200 until the legislation expires in 2028—providing a welcome, albeit temporary, boost for many American families once the president signs it into law.
But low-income parents and their children are unlikely to benefit, researchers at Columbia University told Newsweek.
A stock photo of children walking toward a school entrance.
A stock photo of children walking toward a school entrance.
GETTY
What To Know
Megan A. Curran, the policy director at the Center on Poverty and Social Policy at Columbia University, told Newsweek that 28.3 percent, or 19.3 million children, would not see this increase and would "be left out" of the full $2,200 because "they are in families that do not earn enough to qualify for the new, higher minimum income threshold requirements."
Under the new policy, a two-adult, two-child family would need to earn $41,500 to get the full $2,200 credit, Curran said. Under the current policy, a family of that size needs annual earnings of $36,000 to receive the full $2,000.
"It will also ultimately be much worse for these children because not only do they see no gains from the CTC in this bill, but they are the same children who are now at high risk of losing their health care and food assistance," such as Supplemental Nutrition Assistance Program benefits and school meals, Curran said.
While the expanded CTC approved in the bill is higher, Curran said that even families who receive the full temporary increase are "unlikely to feel it in reality because the CTC has lost value since it was established as $2,000 back at the end of 2017."
"In order to keep up with inflation, the CTC would need to be about $2,500 today in order to maintain its real value from 2017/2018," she said. "Because it is only raised now to $2,200, this means that what is being passed is actually less generous than what was originally passed in the Tax Cuts and Jobs Act as it is smaller in real terms than the original $2,000 credit was then."
What Happens Next
The CTC boost is temporary and expires in 2028 unless lawmakers extend it. At that point, it would drop back down to $2,000 and be indexed to inflation for subsequent years.