During his presidency, Trump’s Tax Cuts and Jobs Act (TCJA) of 2017 significantly changed the tax code, doubling the Child Tax Credit from $1,000 to $2,000 and increasing the refundable portion to $1,400. This expansion was part of broader tax cuts that aimed to reduce tax burdens across various income groups. Some people saw more significant reductions than others, but everyone gained at least a little.
Major provisions in the TCJA will expire by December 31, 2025, unless Congress extends them. The expiration of the Tax Cuts and Jobs Act will affect everyone in one way or another, as tax brackets, income tax rates, child tax credits, state and local tax deductions, mortgage interest deductions, and much more will change overnight.
If the TCJA provision is not renewed, tax rates will revert to their 2017 pre-TCJA rates. Tax experts have warned that citizens should be aware and take steps to ensure they don’t face a host of tax surprises by then.
What will happen to the IRS Child Tax Credit if Trump is president of the United States?
If Trump were to win the presidency again, he would likely aim to extend or make permanent some of the TCJA provisions that are set to expire after 2025. This would likely include maintaining the increased child tax credit amounts. Trump has consistently advocated for tax policies that favor reducing tax burdens on families and businesses.
The TCJA eliminated the personal exemption for each dependent under age 17 but doubled the child tax credit to $2,000 per person. A $1,700 refundable portion in 2024 will be phased in, starting at $2,500 in earned income. If Trump is back in power, the child tax credit is expected to continue at this rate as the TCJA provision will be renewed.
One critical aspect of the Child Tax Credit is its impact on low-income families. Under the American Rescue Plan during the Biden administration, the CTC was temporarily expanded to $3,600 per child under six and $3,000 per child aged six to 17, with full refundability. This expansion significantly reduced child poverty rates but expired in 2021.
A Trump presidency may not see a return to these higher amounts, as his administration focuses on broader tax cuts rather than targeted benefits. This could mean that while the credit would remain higher than pre-TCJA levels, it would not reach the expanded levels seen during the pandemic.
