{"id":40898,"date":"2026-02-06T12:36:14","date_gmt":"2026-02-06T12:36:14","guid":{"rendered":"https:\/\/financialrush.com\/?p=40898"},"modified":"2026-02-06T12:36:14","modified_gmt":"2026-02-06T12:36:14","slug":"how-trumps-child-tax-credit-changes-could-impact-your-refund","status":"publish","type":"post","link":"https:\/\/financialrush.com\/?p=40898","title":{"rendered":"How Trump’s child tax credit changes could impact your refund"},"content":{"rendered":"

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Maskot | Maskot | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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This tax season<\/a>, some families could see a bigger tax break<\/a> for their children due to changes from President Donald Trump<\/a>‘s “big beautiful bill<\/a>.”<\/p>\n

Enacted in July, Trump’s legislation<\/a> permanently increased the maximum child tax credit<\/a> to $2,200 per child for 2025, up from $2,000. That value will be indexed for inflation starting in 2026.\u00a0\u00a0<\/p>\n

If you previously qualified for the full $2,000 credit, the update could trigger a $200 bigger refund<\/a> or a $200 lower tax bill per kid, for your 2025 return, depending on your situation, experts say. \u00a0\u00a0\u00a0\u00a0<\/p>\n<\/div>\n

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Read more CNBC personal finance coverage<\/h2>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n
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In 2025, some 90% of families with children<\/a> received the child tax credit, and the average tax break per family was $2,520, according to the Tax Policy Center.<\/p>\n

Nearly 37 million returns<\/a> claimed the child tax credit or credit for other dependents<\/a> during tax year 2022, based on the latest IRS estimates.<\/p>\n

Here are some key things to know about the tax break, including who qualifies and how to calculate your credit. <\/p>\n<\/div>\n

Who qualifies for the child tax credit <\/h2>\n
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Families must meet certain rules to claim the child tax credit, including age, relationship, support, residence requirements and more. <\/p>\n

Kids must have a valid Social Security number and be under age 17 at the end of 2025. If a married couple filing jointly claims the credit, one filer also must have a Social Security number. The IRS outlines other guidelines here<\/a>. <\/p>\n<\/div>\n

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The child tax credit starts to phase out, or get smaller, once income exceeds $200,000 for single filers or $400,000 for married couples filing taxes together. <\/p>\n

“It’s not based on any expenses you incur,” Margot Crandall-Hollick, a principal research associate at the Urban-Brookings Tax Policy Center, told CNBC. “It’s based on your earnings \u2026 and if you have a kid that qualifies.”\u00a0\u00a0<\/p>\n

By comparison, another tax break for families, known as the child and dependent care tax credit<\/a>, partially reduces up to $6,000 of care expenses for two or more “qualifying individuals” \u2014 typically children under age 13 \u2014 when parents who file taxes jointly both earn income. Families with a single qualifying individual can look to offset up to $3,000 of care expenses.<\/p>\n<\/div>\n

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How the child tax credit works<\/h2>\n
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For 2025, the maximum child tax credit is up to $2,200 per child. If the credit exceeds your taxes owed, you can claim the “refundable” portion, up to $1,700 per kid, which is known as the additional child tax credit, or ACTC. Many lower-income filers don’t owe a tax balance.<\/p>\n

“You get more benefit if you have some tax liability to make up that $500 difference,” said Tommy Lucas, a certified financial planner at Moisand Fitzgerald Tamayo in Orlando, Florida. His firm is ranked No. 69 on CNBC’s Financial Advisor 100<\/a> list for 2025.<\/p>\n

After the first $2,500 of earnings, the child tax credit value is 15% of adjusted gross income, or AGI, until the tax break reaches $2,200. Meanwhile, ACTC is capped at 15% of earnings above $2,500.<\/p>\n

The $2,500 earnings minimum and $1,700 refundability cap means millions of lower-income families won’t receive the full $2,200 credit<\/a> in 2026, according to a January analysis from the Center on Budget and Policy Priorities. <\/p>\n<\/div>\n<\/div>\n\n
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