Both the House and Senate versions of the budget reconciliation bill propose an increase in the child tax credit (CTC), but they differ on the specifics of the payout. Currently, taxpayers with children under 17 can claim a tax credit of up to $2,000 per child, with full eligibility for families earning $200,000 or less, set to revert to $1,000 per child in 2025 without new legislation.
The House proposes raising the CTC to $2,500 per child, maintaining this amount until 2028, followed by a decrease to an estimated $2,100, adjusting for inflation thereafter. In contrast, the Senate aims for a maximum of $2,200 per qualifying dependent, also subject to inflation adjustments post-2026. Both versions retain a maximum refundable portion of $1,700.
However, an estimated 17 million children may not receive the full benefit, largely due to the CTC not being fully refundable. Families earning less than $2,500 cannot claim any portion of the credit, and around 2 million children currently qualify for no credit due to their family’s earnings.
Additionally, both proposals continue the 2018 restriction requiring children to have Social Security numbers to qualify. The House version introduces a new requirement that both parents must have Social Security numbers, while the Senate only requires one. The House also seeks to eliminate the eligibility of married couples filing separately, unlike the Senate proposal which allows this. Under the House plan, the number of children not receiving the maximum credit could rise from 17 million to over 26 million. The proposals are still subject to negotiation, with pressures to finalize the bill soon.
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