In 2025, the child tax credit could undergo some changes.

• The TCJA temporarily raised the maximum child tax credit to $2,000 from $1,000.
• Without action from Congress, the higher benefit could expire after 2025.
• Although there is bipartisan support for the tax break, it is uncertain how it will fare in the face of trillions of competing priorities in future legislation.

The child tax credit claimed by millions of families is uncertain as Congress debates President-elect Donald Trump's agenda.

The Tax Cuts and Jobs Act of 2017, enacted by Trump, temporarily increased the maximum child tax credit to $2,000 from $1,000 per child under 17 and widened eligibility with higher-income phaseouts. However, the higher benefit will revert after 2025 without Congressional action, which could impact returns filed in 2027.

During a committee hearing, House Ways and Means Committee Chairman Jason Smith, R-Mo., stated that families do not need to see Washington cut their child tax credit in half.

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The TCJA capped the refundable portion of the child tax credit, resulting in a reduction of the benefit for lower-income families without taxes due.

Chuck Marr, vice president for federal tax policy at the Center on Budget and Policy Priorities, previously stated that the child tax credit is inverted as it provides greater advantages to higher-income individuals than to lower-income individuals, according to CNBC.

In 2025, approximately 17 million children under the age of 17 with lower-income parents will not receive the full value of the child tax credit, according to a Tax Policy Center analysis released in December.

Although there are worries about the federal budget deficit, both Democrats and Republicans have recently shown support for renewing the expiring child tax credit.

In January 2024, a bipartisan tax package was passed by house lawmakers, which included an expansion of the child tax credit. This change aimed to increase access and retroactively boost the refundable portion for 2023. As a result, it could have triggered refund checks.

Senate Republicans expressed interest in future negotiations on legislation despite blocking it in August due to policy concerns.

With trillions of competing priorities and a growing budget deficit, it is uncertain if lawmakers will renew the enhanced child tax credit and whether its future form will be different.

The US Department of the Treasury reported on Tuesday that the three-month fiscal year 2025 deficit ballooned to $710.9 billion in December, which is nearly 40% above the same period the previous year.