Congress Raises Child Tax Credit, but Millions Still Left Behind

Congressional lawmakers have permanently boosted the Child Tax Credit as part of sweeping budget reconciliation talks, but the final numbers reveal a painful gap. While the maximum credit went up, an estimated 19 million children will receive less than the full amount, or nothing at all, because their families earn too little. As the Senate now shapes its own version, the fight over who really benefits is far from over.

What Changed Under the New Tax Law

The One Big Beautiful Bill Act, President Donald Trump’s sweeping spending package passed in July 2025, made the higher credit permanent and preserved the expanded income thresholds that determine eligibility.1

According to the Internal Revenue Service, the legislation increased the maximum Child Tax Credit to $2,200 starting in 2025, up from the previous $2,000 limit.1 Starting in 2026, this amount will be adjusted for inflation annually.2

Without this legislation, the credit would have been cut in half. The Tax Cuts and Jobs Act, which took effect in 2018, doubled the credit from $1,000 to $2,000 per child. That increase was originally temporary and slated to expire at the end of 2025.1

The new law also cements identification requirements first introduced under the TCJA. Children claimed for the credit must have a Social Security number, and taxpayers claiming the credit must also meet Social Security number rules. For married couples filing jointly, at least one parent must have a Social Security number to qualify.1

On March 10, 2026, Senator John Cornyn (R-TX) touted the pro-family and child care provisions Republicans delivered in the Working Families Tax Cuts to alleviate the costs parents face, including by doubling the Child Tax Credit, lowering the cost of child care, and strengthening the Paid Family and Medical Leave Credit.3

child tax credit 2026 impact on low income families and children

House vs. Senate: Two Different Plans for Families

The two chambers proposed different dollar amounts, and that gap shaped the entire debate.

The House proposal would increase the maximum credit to $2,500 per child, while the Senate’s version provides up to $2,200 per qualifying dependent.4

Under the House’s plan, the $2,500 limit would remain in place until 2028, then drop to an estimated $2,100 and be indexed for inflation in subsequent years, according to the Tax Policy Center.4

Under the House plan, both parents of a child would need an SSN to claim the benefit while under the Senate Finance Committee draft, at least one parent would need an SSN.5 This new parental restriction in the House plan would eliminate an additional 2 million children from the higher CTC level, as noted in recent testimony by the chief of staff of the Joint Committee on Taxation.5

For a family with three children, the House plan means up to $7,500 in credits compared to $6,600 under the Senate version. That is $900 more per year, money that could go straight to groceries, rent, or child care.

19 Million Children Could Miss the Full Credit

Despite the bigger number on paper, the fine print tells a harder story.

An estimated 19 million children, or more than 1 in 4 children under 17, will receive less than the full $2,200 credit in 2026, or no credit at all, because their families earn too little.6

This hits Black, Latino, and Indigenous children the hardest. This includes half of Black children, more than 4 in 10 American Indian and Alaska Native children, and more than 1 in 3 Latino children, whose families often face the effects of past and current discrimination and barriers to opportunity.6

Here is why so many families fall through the cracks:

• Families with low incomes must earn $2,500 before they can begin getting the refundable CTC.7
• The cap on the refundable portion is $1,700 per child.8 That is far less than the $2,200 maximum.
• In practice, a family with three children will often receive even less than $5,100 because of additional restrictions based on their earnings. For example, if the family earns $30,000, they may only qualify for $4,125 in credits. This is about one-third less than the $6,600 maximum available to higher-income families.8

Under the House version, the picture gets worse. TPC estimates that in 2026, the number of children with SSNs who live in families that do not receive the full $2,500 CTC will jump from 17 million to over 26 million, more than 1 in 3 children in the US.5

Child Poverty Remains a Deep Concern

The stakes behind these numbers are enormous.

The child poverty rate was 13.3% in 2024, remaining significantly higher than the 2021 historic low of 5.2%.9 Approximately 5.9 million more children were living below the poverty line in 2024 than in 2021.9

Child poverty in the U.S. has surged, nearly tripling from 5% in 2021 to 13% in 2024. This dramatic increase follows the expiration of pandemic-era economic policies and rising prices that have strained family budgets.10

The Child Tax Credit has proven it can move the needle. The credit lifted 4.1 million people, including 2.4 million children, above the poverty line in 2024.6

Senate Finance Committee Chairman Mike Crapo said: “Parenthood is a unique gift, but the financial challenges of raising a family are real. This legislation responds to that challenge by providing additional support for young and growing families.”11

But researchers at Columbia University’s Center on Poverty and Social Policy found that on its own the Child Tax Credit lowered the 2024 rate by 19.6%, while the American Family Act version could have cut it nearly in half.9

Beyond the CTC: Other Family Tax Benefits in the Package

The Working Families Tax Cuts Act goes beyond just the Child Tax Credit. Here are other key provisions families should know about.

The Working Families Tax Cuts advanced by U.S. Senate Finance Committee Chairman Mike Crapo are investing in American families through a variety of new and expanded tax credits that help parents better afford common expenses for their children, like child care and education.11

Key benefits for families starting in 2026:

• Taxpayers can now receive between 20% and 50% of their qualifying child care expenses as a credit, depending on income.12
• Employer-provided DCAPs allow working parents to set aside up to $7,500 from their pre-tax income for child or dependent care expenses, up from $5,000.12
• The Adoption Tax Credit is now partially refundable.11
• The law establishes tax-advantaged Trump Accounts to help build long-term financial security for children.11
• The Paid Family and Medical Leave Tax Credit is now permanently expanded to help new parents get paid time off work after having a child.11

Child care-related tax breaks can help parents offset the cost of care, but they had not been updated in decades. The new law includes a $16 billion investment in child care-related tax credits.11

Meanwhile, the Republican Study Committee released a framework for a second budget bill, known as “Reconciliation 2.0,” which includes expanded access to the child and dependent care tax credit.13 However, it is unclear whether Reconciliation 2.0 will happen in 2026 amid competing legislative priorities, experts say.13

The numbers do not lie. The Child Tax Credit just got bigger for many families, and the broader tax package delivers real improvements in child care and paid leave. But for the parents working long hours at low wages, the families earning less than $30,000 a year, and the children who fall on the wrong side of the eligibility rules, the gap between what Congress promised and what actually reaches their pockets is still painfully wide. Every child in America deserves better. Tell us in the comments: how are these changes affecting your family? If you want to keep this conversation going, share your story with friends and family so more people understand what is at stake.