The Child Tax Credit Is Changing And Millions Of Families Will Feel It

A major shift to the child tax credit is set to take effect this year, reshaping both how much families can receive and who is eligible to claim it.

Under a tax and spending package signed into law by President Donald Trump, congressional Republicans made permanent changes to the child tax credit that will apply to families filing tax returns in 2026. While the new law raises the value of the credit and ties it to inflation — it also adds new eligibility requirements that disproportionately affect immigrant families and those with the lowest incomes.

What’s changing

The new law increases the maximum child tax credit from $2,000 to $2,200 per child and indexes the benefit to inflation, meaning it will grow over time and keep up with rising costs.

At the same time, the law introduces stricter requirements tied to income and immigration status. For the first time, at least one parent or guardian — in addition to the child — must have a Social Security number to qualify. As a result, an estimated 2.7 million children who are eligible for the credit this year are expected to lose access beginning next year.

The child tax credit, first enacted in 1997, has long helped families cover basic expenses like food and housing, as well as costs tied to education and extracurricular activities. But throughout its nearly three-decade history, the credit has been structured in a way that prevents the poorest families from receiving the full amount.

Those inequities remain — and, by some measures, are growing.

Who is left out

Because the credit phases in with income, families must earn more than before to receive the full $2,200 benefit. According to an analysis by Columbia University’s Center on Poverty and Social Policy, roughly 19 million children will be blocked from receiving the full credit under the new law.

“Families of all sizes are going to need higher levels of income to be eligible for the full credit amount,” said Christopher Yera, a research analyst at Columbia.

These changes come as other safety-net programs face deep cuts. The same tax package reduces funding for the Supplemental Nutrition Assistance Program by $186 billion through 2034, affecting food assistance and school meal eligibility. Medicaid and the Children’s Health Insurance Program are also slated to lose a combined $1 trillion over the next decade.

“All these families that are going to lose access to basic needs — it would be helpful if the people most affected were actually reached by the child tax credit,” said Meredith Dodson, senior director of public policy at the Coalition on Human Needs.

How the new child tax credit works

What is the child tax credit?The child tax credit is a tax benefit families can claim each year for children under 17 in their care. Stepchildren, foster children, siblings and certain relatives — including grandchildren and nieces or nephews — may qualify if the filer is their primary caregiver.

Since 2017, the maximum credit has been $2,000 per child. Families with very low or no earnings have typically been unable to claim the full amount, except briefly in 2021 during the pandemic-era expansion.

What is the new amount?

For the 2025 tax year, families can claim up to $2,200 per child, which will appear in tax refunds issued in 2026. The credit will increase annually with inflation starting that year.

Who qualifies?

Eligibility rules are tightening:

• Single filers must have a Social Security number to claim the credit.

• Joint filers need at least one parent with a Social Security number.

• The child must:

  • Have lived with the caregiver for at least six months in 2025 (with limited exceptions)

  • Have lived in the United States for at least six months

  • Have a Social Security number

Previously, parents without Social Security numbers could still claim the credit using an Individual Taxpayer Identification Number (ITIN) if their child had a Social Security number. That is no longer sufficient. Families headed by undocumented single parents will be entirely excluded, even if the child is a U.S. citizen.

“Instead of truly expanding the credit, they took it away from millions of kids,” Dodson said. “The changes miss the mark by excluding the families who need it most.”

Do all eligible families receive the full $2,200?

No. Families earning less than $2,500 per year receive no credit at all. After that, the benefit phases in as income rises.

Families with little or no tax liability can receive up to $1,700 as a refundable credit in 2025. The remaining amount is only available once earnings reach higher thresholds.

The credit begins to phase out for higher earners:

• $200,000 for single filers

• $400,000 for joint filersIt fully disappears at $240,000 for single filers and $440,000 for joint filers.

Income needed to receive the full credit

According to Columbia University’s analysis:

• One child:

  • $28,700 (single) / $36,500 (joint)

• Two children:

  • $33,700 (single) / $41,500 (joint)

• Three children:

  • $38,700 (single) / $46,500 (joint)

• Four children:

  • $45,800 (single) / $51,500 (joint)

Overall, 28% of children will be ineligible for the full credit because their parents earn too little.

States with the highest share of children excluded from the full benefit include Mississippi, Louisiana, New Mexico, Alabama and Kentucky.

How to claim the credit

Families must list qualifying children on Form 1040 and complete Schedule 8812 when filing their federal tax return.

How this compares to 2021

The new credit is not comparable to the 2021 expansion, which temporarily increased the benefit to as much as $3,600 per child and delivered much of it through monthly payments. That expansion allowed the poorest families — including non-filers — to access the credit for the first time and helped cut the child poverty rate to a historic low of 5.2%.

When the expansion expired, the credit reverted to $2,000 and child poverty more than doubled the following year.

Is this change permanent?

Yes. Unlike past expansions, the new child tax credit rules are permanent. Lawmakers can revise the policy in the future, but there is no expiration date built into the law.