THE child tax credit has permanently jumped by $200 thanks to new legislation under the Trump administration.
However, a new Social Security number rule could do away with the extra cash.
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On Independence Day this year, the president officially signed his One Big, Beautiful Bill Act into law, a comprehensive legislative package outlining a slew of tax cuts and spending changes.
The GOP-backed budget reconciliation bill makes Trump’s 2017 Tax Cuts and Jobs Act, or TCJA, permanent – a major tax haul known as the “Trump tax cuts” that was enacted during his first presidential term.
In extending the expiring TCJA provisions, the One Big, Beautiful Bill is officially establishing several changes to the federal child tax credit.
The maximum child tax credit before the TCJA stood at $1,000 per qualifying child, with the Trump tax cuts temporarily doubling the maximum CTC to $2,000.
Trump’s reconciliation bill has now made the TCJA changes permanent and further raised the maximum child tax credit for 2025 to $2,200 per qualifying child.
The credit will be adjusted each year to account for inflation starting in 2026.
For the 2024 tax year, the refundable portion of the child tax credit was up to $1,700.
Now, the maximum refundable portion of the credit will not exceed $1,400 per qualifying child, subject to inflation.
A child must be age 17 and under to be eligible for the credit under the TCJA, whereas before the Trump tax cuts, the credit was handed out for children 16 and under.
SOCIAL SECURITY REQUIREMENT
The tax haul also tweaked the child tax credit eligibility requirements pertaining to Social Security numbers.
Prior to the TCJA, eligible children did not need a Social Security number, although they still needed an Individual Taxpayer Identification Number.
Now that the TCJA is permanent, children without eligible Social Security numbers cannot receive the full child tax credit amount.
The One Big, Beautiful Bill Act has also outlined that both a child and their parent must present a valid Social Security number in order to claim the credit.
The child tax credit was previously available for dependent children if they were US citizens, regardless of their parents’ citizenship status.
Trump’s latest immigration crackdown initiatives
- Donald Trump announced on May 5 that illegal immigrants who “self-deport” will be given a $1,000 stipend and free flight home
- WH Press Secretary Karoline Leavitt reported that the 7,000 illegal immigrants attempted to cross the border in March – the lowest in history
- Trump declared Mexican cartels and the El Salvadorian gang MS-13 terrorist organizations
- On May 4, Trump also announced he plans to reopen the notorious Alcatraz prison, which once housed gangster Al Capone
- In January, Trump revealed plans to send up to 30,000 illegal immigrants to detention facilities in Guantanamo Bay, Cuba
- In March, the US president began to deport hundreds of alleged gang members to a notorious prison in El Salvador
Now, taxpayers and their spouses – if married and filing jointly – must have their work-eligible Social Security number to claim the child tax credit.
More than 4.5 million children, most of whom are citizens, will no longer qualify for the credit under the One Big, Beautiful Bill Act, per estimates from the Center for Migration Studies.
Tax policy analysts have also warned that millions of children in cash-strapped families are being left out under Trump’s reconciliation bill.
The structure of the tax credit “largely leaves low-income children out,” per an analysis by the Tax Policy Center.
Roughly 17 million children, or around 25%, will continue to receive less than the full child tax credit or no credit because of their family’s income.
Families earning under $2,500 per month are generally not eligible for a refund from the child tax credit.
Families in one state could score a new $1,000 tax credit in a move to “put money back in pockets.”
Meanwhile, aside from raising the child tax credit, the One Big, Beautiful Bill Act may see electricity bills spike by $130 for each household in another US state.
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