Donald Trump won the 2024 US Presidential elections and became the 47th US President. After his win, many people are wondering about the Child Tax Credit as both Democrats and Republicans supported the hike in CTC during their Presidential Campaign. Let’s see what we can expect from the newly formed Trump Administration in the context of CTC.
Trump Child Tax Credit
The tax provisions on child Tax credit expansion were one of the most discussed issues in the 2024 US Presidential elections. Both Harris and Trump have supported the expansion of CTCs during the Presidential Campaign, understanding the needs of families raising children with the rising cost of living.
The Child Tax Credit helps households get a tax break when they are raising qualifying children to relieve their financial burden and reduce children’s poverty.
The Republicans have not mentioned any income threshold or any other details of the CTC for the coming years. Based on the Trump CTC expansion from $2,000 to $3,600 during the pandemic and Trump’s intent to expand CTC, Americans can expect changes after Trump holds the US presidential office.
Current CTC benefit
The federal Child Tax Credit for eligible families with qualifying children reduces their tax bills and might even increase their tax refund. The eligible parents and guardians who meet the CTC
Eligibility requirements receive the CTC amount depending on the age and income of the applicants under the Tax Cuts and Jobs Act 2027, such as:
- For children under 17, the CTC is up to $2,000
- According to the 2025 inflation adjustment, if the CTC exceeds the taxes you owe for the 2024 tax year, you may receive the $1,700 CTC for each child as a 2024 tax year refund.
- If the child is under 18 or older and meets certain dependents conditions where he/she is a full-time student, the families may receive $500 for each such child.
The CTC payout commences to phase out if the family’s net income is above the income threshold, for instance, if the head of household’s annual income goes above $200,000 and $400,000 for married couples who filed their federal income tax jointly.
Who qualifies for the Child Tax Credit?
According to the federal Tax Cuts and Jobs Act 2027, the child for which you are applying for the CTC may meet the following eligibility requirements:
- The child must be under 17 or meet the requirement of 18 or 19 years of age to get CTC.
- The child can be your son, stepchild, daughter, eligible foster child, sister, brother, half-sister/ brother, stepbrother, step-sister, or a descendent for whom you are responsible.
- The child must be a US citizen, national, or resident from the qualified alien category.
- The child or children must believe with you for 50% of the time or more than half a year.
- The child who offers financial support or half of support during the tax year would not qualify for CTC.
- The child must be mentioned as dependent on your federal income tax return for the respective tax year.
- You have not filed the joint tax return or if filed it must be only to claim the withhold or estimated paid tax refund.
Regarding the income threshold for CTC, we have mentioned above that parents or guardians whose income goes above the limit may not receive the payment, but they may qualify for the partial credit, so do check the CTC website.
Impact of the Child Tax Credit Increase
If the Trump administration increases the Child Tax credit for Americans it will impact the people exponentially. Let’s see how the CTC expansion will impact the citizens:
- If the Trump administration expands CTC to $5,000 for American families, it will improve the lives of low-income families and support the parents or guardians in fulfilling the needs of children that every child needs for their proper growth and development.
- When the CTC was hiked during the pandemic, childhood poverty was lowered down by 30% even when the Biden administration increased the CTC the poverty was reduced. So, if the expansion happens, it will surely positively impact the children’s poverty and improve their living.
- Child care can be expensive. The newly born parents or people who suddenly get the responsibility of children can easily navigate through the childcare costs with expansion. The financial support will save them from financial stress and focus more on the child’s growth and development.
The newly elected US president will be sworn in as the President in the Presidential inauguration, scheduled to be held on 20 January 2025, so the new policies or expansion on CTC will be clear by then only.
