Both the House and Senate versions of the budget reconciliation bill include an increase to the child tax credit, but the House’s version gives a larger payout to families.
The child tax credit is a partially refundable tax credit available to taxpayers with children or dependents under age 17. Parents and guardians earning $200,000 a year or less are eligible to claim the full $2,000 credit per child through tax year 2025. Without new legislation, that limit will revert to $1,000 per qualifying child after the expiration of the 2017 Tax Cuts and Jobs Act in 2025.
Congress is trying to increase the maximum credit amount through its budget reconciliation process, but the chambers differ on proposed maximum amounts. 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.
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. The Senate’s plan would also adjust the maximum credit amount for inflation after 2026. Both proposals keep the maximum refundable portion of the credit at $1,700.
