How Trump’s child tax credit changes could impact your refund

This tax season, some families could see a bigger tax break for their children due to changes from President Donald Trump’s “big beautiful bill.”

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

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

In 2025, some 90% of families with children received the child tax credit, and the average tax break per family was $2,520, according to the Tax Policy Center.

Nearly 37 million returns claimed the child tax credit or credit for other dependents during tax year 2022, based on the latest IRS estimates.

Here are some key things to know about the tax break, including who qualifies and how to calculate your credit.

Families must meet certain rules to claim the child tax credit, including age, relationship, support, residence requirements and more.

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.

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.

“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 … and if you have a kid that qualifies.”  

By comparison, another tax break for families, known as the child and dependent care tax credit, partially reduces up to $6,000 of care expenses for two or more “qualifying individuals” — typically children under age 13 — 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.

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.

“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 list for 2025.

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.

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