The Child Tax Credit (CTC) was started in 1997 under President Bill Clinton as part of the Taxpayer Relief Act, evolving from bipartisan recommendations by the National Commission on Children (1991) and Republican proposals in the "Contract with America," though it has been significantly expanded and modified under later administrations.
Newt Gingrich and his Congress passed the very first Child Tax Credit, which President Bill Clinton signed into law in 1997. Incremental improvements were made to the credit under presidents George W. Bush (2001), Barack Obama (2009) and Donald Trump (2017).
The child tax credit was created in 1997 by the Taxpayer Relief Act of 1997 (P.L. 105-34) to help ease the financial burden that families incur when they have children. Like other tax credits, the child tax credit reduces tax liability dollar-for-dollar of the value of the credit.
President Donald Trump signed his "big beautiful" spending bill into law on July 4. One provision is an increase to the maximum child tax credit, raising it from $2,000 per eligible child to $2,200 beginning in 2026.
They overwhelmingly opposed Democrats' expansion of the credit that provided families with monthly checks to pay bills and cut childhood poverty in half. Faced with this life-changing data, they refused to help us extend the expanded benefit and allowed it to expire.
In 1987, Congress created a bipartisan National Commission on Children tasked with developing policies for the benefit of children and families. Its final report included many policy ideas, including what would eventually become the Child Tax Credit.
The American Rescue Plan Act – which President Biden signed into law in 2021– included a revolutionary expansion of the existing Child Tax Credit (CTC).
Tax policy
It extended the Bush tax cuts for roughly the bottom 99% of income earners (those earning below $400,000, or $450,000 for married couples). Capital gains, dividends, and estate tax rates were also increased relative to the 2003–2012 levels; these also mainly affect high-income and wealthy households.
The American Rescue Plan increased the child tax credit to $3,000 per child age seven or older and $3,600 per kids six and younger. It also raised the age limit of eligible children from 16 to 17 years old.
"We passed the largest tax cuts in American history, including no tax on tips, no tax on overtime, no tax on Social Security for our great seniors," Trump said in a speech at the World Economic Forum in Davos, Switzerland, on Wednesday.
The American Rescue Plan Act (ARP) of 2021, a stimulus bill advanced by Democratic lawmakers and signed into law by President Joe Biden in response to the economic downturn caused by the COVID-19 pandemic, expanded the child tax credit by allowing qualifying families to offset, for the 2021 tax year, $3,000 per child ...
Your child tax credit is likely $500 instead of $2,000 because they either turned 17 during the tax year, making them eligible for the Other Dependent Credit, or you might have mistakenly checked a box in your tax software, like saying their SSN isn't valid for employment or that they paid over half their own support, which triggers the lower credit amount, according to TurboTax support, TurboTax support, TurboTax support, and TurboTax support https://ttlc.intuit.index.php/community/taxes/discussion/my-daughter-is-17-but-is-still-jr-in-high-school-why-do-i-only-get-500-for-her-and-not-the-full-2000/00/3423950.
The Joe Manchin failure, and the larger failure
There's a very simple answer to why the child credit didn't continue: there weren't 50 senators willing to support its extension. And most public reporting suggests the main holdout was Sen. Joe Manchin.
Enacted in 1997 and expanded multiple times with bipartisan support since 2001, the Child Tax Credit helps make the cost of raising children more affordable for families. The credit is worth up to $2,200 per eligible child (under age 17 at the end of the tax year) for 2025.
Saturday, March 29, 2025, marks the 50th anniversary of this important credit. A component of the Tax Reduction Act, EITC was signed into law by President Gerald Ford on March 29, 1975.
Child poverty fell by nearly one-half, reaching its lowest level ever, after the American Rescue Plan Act of 2021 temporarily increased the credit to $3,000 per child ($3,600 for children under 6) and allowed low-income families to be fully eligible for the credit.
The Child Tax Credit was created in 1997, providing $400 per child in 1998 (about $725 in 2023 dollars) and $500 per child (about $875 in 2023 dollars) in the immediate years after that. Under Presidents Bush, Obama, and Trump, the Child Tax Credit gradually increased to $2,000 per child.
To be eligible, your child must be under 17 years old and be listed as a dependent on your tax return. You (or your spouse, if married filing jointly,) and each qualifying child must have a valid Social Security number issued before the due date of the tax return.
"The One Big Beautiful Bill Act made the Tax Cuts and Jobs Act changes permanent, increased the maximum CTC amount from $2,000 per child to $2,200 per child beginning in 2025, and adjusted the maximum credit for inflation beginning in 2026," read the Tax Policy Center's website.
Clinton signed the Omnibus Budget Reconciliation Act of 1993 into law on August 10, 1993. The law created a 36 percent to 39.6 percent income tax for high-income individuals in the top 1.2% of wage earners. Businesses were given an income tax rate of 35%.
"Read my lips: no new taxes" is a phrase spoken by American presidential candidate George H. W. Bush at the 1988 Republican National Convention in New Orleans as he accepted the nomination on August 18.
The 2017 Tax Cuts and Jobs Act, enacted by the Trump administration, raised the credit from $1,000 to $2,000 and Trump has expressed intent to “consider a significant expansion of the child tax credit.” While Trump has not elaborated on specifics for an expansion, his running mate Ohio Sen.
The American Rescue Plan increased the child tax credit (CTC) for 2021.
Yes, you might be able to claim your 25-year-old son as a dependent if he meets the "qualifying relative" tests (under $5,050 gross income, you provide over half his support, lives with you, etc.) or if he's permanently and totally disabled, but not as a "qualifying child" due to age unless he's a student under 24 and younger than you, which at 25 he likely won't meet. The main path for a 25-year-old is the Qualifying Relative rules, focusing on his income and your financial support.