Who Benefits from the Child Tax Credit?

It’s the tax code’s main provision aimed at helping parents afford the cost of raising a family. Yet the structure of the Child Tax Credit means that not all working families benefit from expansion by the same amount.

How some families benefit from the Child Tax Credit

Meet the Hawkins

Gerry Hawkins works as a loan officer at a credit union in central Florida, and his wife, Sarah, works part-time as a yoga instructor and volunteers at the school their daughter Kaitlin attends. Together, their household income totals $85,000. f the One, Big, Beautiful Bill passes:

  • Their federal income tax liability will be $5,992

  • The Child Tax Credit will reduce their tax liability by $2,500, to $3,492

  • Their total child-related tax benefits will total $2,500

Meet Bruce and Dennis

Bruce Hamlin is a single dad in Minot, North Dakota, who works as a butcher making $38,960. His son, Dennis, spends most of the day with Bruce’s mom, which means they do not benefit from the Child and Dependent Care Tax Credit. If the One, Big, Beautiful Bill passes:

  • His federal income tax liability will be $1,556

  • The Child Tax Credit will eliminate his tax liability, and he will be eligible for a refundable, Additional Child Tax Credit of $944

  • His total child-related tax benefits will total $2,500

Meet the Kemps

Gary and Shawna Kemp live in Kent, Washington. He works in maintenance, while she picks up a few hours a week while the youngest of their four kids is in preschool. Together, they brought home $51,500 last year. If the One, Big, Beautiful Bill passes:

  • Their federal income tax liability will be $2,030

  • The Child Tax Credit will eliminate their tax liability, and they will be eligible for a refundable, Additional Child Tax Credit of $6,800 (capped at $1,700 per child)

  • Their total child-related tax benefits will be $8,830; or $1,170 short of $10,000 ($2,500 times four kids)

Meet Maria, Emilia, and Mateo

Maria Castillo earns $34,250 as a physical therapist assistant, and lives with her two children just outside of Reno. If the One, Big, Beautiful Bill passes:

  • Her federal income tax liability will be $1,085

  • The Child Tax Credit will eliminate her tax liability, and she will be eligible for a refundable, Additional Child Tax Credit of $3,400 (capped at $1,700 per child)

  • Her total child-related tax benefits will total $4,485; or $515 short of $5,000 ($2,500 times two kids)

Meet the Bowmans

Mike and Terry Bowman live in Johnson City, Tennessee, where she stays home with their three school-age kids and he works full-time as a delivery truck driver, picking up and delivering purchases from a distribution center, making $44,140 a year. If the One, Big, Beautiful Bill passes:

  • Their federal income tax liability will be $1,294

  • The Child Tax Credit will eliminate their tax liability, and they will be eligible for a refundable, Additional Child Tax Credit of $5,100 (capped at $1,700 per child)

  • Their total child-related tax benefits will be $6,394; or $1,106 short of $7,500 ($2,500 times three kids)

Meet Hannah and her children

Hannah Bowman lives in an apartment on the outskirts of Lubbock with her boyfriend, Adam, and their sons, Braden and Caleb. Hannah and Adam know that if they get married, they will lose her Medicaid coverage, so remain cohabiting and file their taxes separately. She makes $23,600 working at a salon. If the One, Big, Beautiful Bill passes:

  • Her federal income tax liability will be $20

  • The Child Tax Credit will eliminate her tax liability, and she will be eligible for a refundable, Additional Child Tax Credit of $3,165 (capped at 15 percent times her taxable income, $23,600, minus the $2,500 earnings threshold)

  • Her total child-related tax benefits will total $3,185; or $1,815 short of $5,000 ($2,500 times two kids)

Stylized examples taken from real-world families. Earnings taken from median annual wage in Occupational Employment and Wage Statistics (BLS). For the sake of simplicity, these calculations assume the One, Big, Beautiful Bill standard deduction enhancements are added on top of the 2024 standard deduction rates, and ignores other deductions, credits, or other provisions.