Many of the tax cuts in the Tax Cuts and Jobs Act of 2017 are set to expire this year. If you’re a parent, you may be wondering what the Child Tax Credit looks like for 2025. As lawmakers wrestle with tax policy, the CTC sits at a crossroads—caught between the TCJA, stalled efforts for reform in 2024, and a political landscape with an uncertain appetite for extension.
The 2025 Status Quo
For tax year 2025, the CTC remains unchanged from its TCJA-enhanced version. That means parents can still claim $2,000 per qualifying child under age 17, enjoy partial refundability of up to $1,700 per qualifying child, with an income phaseout starting at $200,000 for single filers and $400,000 for joint filers.
That structure remains in place through 2025—but absent congressional action the CTC will shrink dramatically for tax year 2026.
The 2026 Change
Barring new legislation, the CTC will revert to pre-TCJA levels next year. That means the credit will drop to $1,000 per child and refundability will no longer be keyed to inflation. The latter change means the refundable portion of the credit’s real value will diminish over time.
Despite bipartisan interest in avoiding a sharp cut to the CTC in 2026, disagreements persist. Some Republican lawmakers oppose the expanded refundability, arguing it weakens work incentives. Others have hinted at support for a larger and more accessible credit.
Democrats, meanwhile, favor a return to the expanded 2021 model but have not found widespread support in the GOP. Even within the Republican Party, there does not appear to be a consensus as to whether an expanded CTC should be part of broader tax reform, pursued independently, or left to expire.
2025 Outlook and Beyond
For 2025, the CTC remains steady at $2,000 per child. The real battle comes in 2026, when Congress must either extend the current provisions, expand the credit further, or let it fall back to pre-TCJA amounts. For now, parents should prepare for at least one more year of the TCJA CTC status quo—but keep an eye on negotiations that will shape the credit’s future.
During the Covid-19 pandemic, the CTC was expanded significantly—to great positive effect. The expansion of the credit to $3,600 for children under age 5, $3,000 for those ages 6 to 17, and $2,000 for all others—coupled with total refundability—lifted 3.7 million children out of poverty. Unfortunately, its expiration in 2022 cast just as many back into economic precarity.
One of the most impactful changes to the CTC during the pandemic was the shift from lump-sum payments at tax filing time to monthly disbursements. Families were able to count on predictable and steady payments throughout the year—helping them cover essential expenses like rent and groceries without having to turn to credit. For a low-income family living paycheck to paycheck, disbursement timing is a game-changer.
Prior to taking office, the Trump administration had indicated a willingness to expand the credit even beyond its Covid-19 era levels, potentially to as much as $5,000 per child. However, with the TCJA’s broader tax provisions also set to expire in 2025, lawmakers face a major tax policy slide puzzle. It is also an open question whether lawmakers would consider a return to monthly payments, as against the more standard approach of disbursing tax credits at filing time.
Extending the CTC in its current form—or expanding it further—will have to compete with efforts to maintain lower individual tax rates, preserve the higher standard deduction, and address the corporate tax landscape. With fiscal hawks already warning against a ballooning deficit, it’s an open question whether the CTC will get the attention it needs in a crowded tax debate landscape.
Ultimately, the fate of the CTC will hinge on whether lawmakers can reconcile competing priorities—preserving corporate tax cuts, managing the deficit, and supporting working families. While there’s broad recognition that allowing the CTC to revert to pre-TCJA levels would be politically unpopular, how much expansion Congress will actually support remains to be seen. After all, the Covid-19 era expansion was politically popular as well—and yet it was allowed to expire with little fanfare.
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