“The popular child tax credit will receive a slight boost from President Trump’s signature tax and spending bill — but there are caveats.
Currently, taxpayers who make under $200,000 annually as a single filer, or $400,000 if filing jointly, can qualify for a partially refundable credit of up to $2,000 for each child they claim as a dependent who is under age 17 and a US citizen or qualifying noncitizen.
The new legislation increases the credit to a maximum $2,200 per child. Without the bill, the maximum credit would have reverted to $1,000.
But the increase, which amounts to a 10% bump, follows years of rising prices that have chipped away at the value of the original benefit. And many extremely low-income children — in addition to US citizen kids of undocumented parents — will be locked out of the payments altogether.”
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“To qualify for the refundable portion of the child tax credit, which is called the “additional child tax credit” and can be worth up to $1,700, taxpayers must earn at least $2,500 in annual income. (A refundable tax credit can lower tax liability past zero, potentially generating a refund.) Families who make less than that receive no benefit, while many more children are in low-income households that earn just enough to receive part of the benefit but not enough to receive the full payment.”
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“The average benefit for taxpayers with children who made between $10,000 and $20,000 in 2022, for example, was $800, according to the Congressional Research Service. That pay range includes people who worked full-time jobs at the federal minimum wage. Families earning between $200,000 and $500,000, meanwhile, saw an average benefit of $2,810.”