Expanding the Child Tax Credit Should Be a Top Priority in 2025 Tax Debate – CBPP
“Under current law, three major design flaws in the Child Tax Credit deny its full benefit to millions of children in low-income families:
- it phases in slowly at $0.15 per dollar of earnings, regardless of the number of children in a family;
- it starts phasing in only after a family has $2,500 in earnings; and
- it caps the credit amount that families with lower incomes can receive as a refund to $1,700 per child (for 2024), less than the $2,000 maximum for children in families with higher incomes. (The 2017 tax law set the limit on the credit refund amount, which is sometimes referred to as a “refundability cap.”)
“The credit is also unavailable to 17-year-olds, who typically are still in high school. An estimated 1 in 4 children — or roughly 19 million children — got less than the full $2,000-per-child credit or no credit in 2022 because their families’ incomes were too low.”