Families will receive more but will need to meet more requirements to qualify.
A new child tax credit is coming next year, bringing significant changes that will alter how much assistance families receive — and which families can receive it.
With his tax and spending package, President Donald Trump passed a permanent change to the child tax credit spearheaded by congressional Republicans. It goes into effect for families filing income tax returns in 2026.
The changes increase the total amount of the tax credit from $2,000 to $2,200, and index it to inflation so it grows over the years, a change advocates have championed for years. However, the package also introduces new parameters to qualify for the credit that will directly affect immigrants and the lowest-income families.
For the first time, children and at least one of their parents or guardians will have to have a Social Security number to be able to qualify for the child tax credit. That means an estimated 2.7 million American kids who likely qualify for the credit this year will no longer be able to get it as of next year.
The tax credit was passed in 1997. Families have used it to help cover basic needs like food and also wants, like getting their children into extracurricular activities.
But for its nearly 30-year history, the credit has been structured in a way that families with the lowest incomes couldn’t get the full amount. With the most recent change, and because the credit phases in depending on income and the number of children you have, families have to earn more before they can claim the full amount.
Democrats had been pushing to change those requirements in recent years so that the lowest-income families could get more of the credit, but Republicans pushed back, saying it disincentivized people to work.
Under the new child tax credit, an estimated 19 million children are now blocked from receiving the full amount, compared with 17 million currently, according to an analysis by the Center on Poverty and Social Policy at Columbia University, which has done much of the research and analysis on the child tax credit. The share of children from marginalized backgrounds who are not going to be able to receive the full amount has also gone up for each group:
“Families of all sizes are going to need higher levels of income to be eligible for the full credit amount,” said Christopher Yera, a research analyst at the Center on Poverty and Social Policy. The child tax credit is being cut at a time when other vital services for low-income Americans are seeing reductions.
Under the same tax package, the Supplemental Nutrition Assistance Program is losing $186 billion in funding through 2034, affecting eligibility for free school meals and for families that rely on the assistance to put food on the table. Another $1 trillion will be cut from Medicaid and the Children’s Health Insurance Program in the next decade.
