Greetings—


Several provisions of the Tax Cuts and Jobs Act of 2017 (TCJA) affecting individual income taxes are set to expire after 2025. Key among these expiring provisions are changes to the child tax credit (CTC), a credit worth up to $2,000 per child under 17.


As Congress grapples with extending the TCJA, researchers from the Urban-Brookings Tax Policy Center present
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nine options to further modify the CTC alongside extending other expiring individual provisions and evaluate their distributional and revenue effects. All of these assume Congress will at least extend the $2,000 per child credit level. Options include:
1. Phase in the CTC starting with the first dollar of earnings up to $2,000 per child.
2. Phase in the CTC at 15 percent per child, up to 45 percent.
3. Combine options 1 and 2.
4. Make the CTC fully refundable for newborns.
5. Extend CTC eligibility to 17-year-old children.
6. Increase the maximum CTC to $2,500 per child.
7. Increase the maximum CTC to $5,000 per child.
8. Enhance the phase-in and increase the maximum CTC to $2,500 per child (fully refundable for newborns).
9. Enhance the phase-in, increase the maximum CTC to $2,500 per child (fully refundable for newborns), and modify the phaseout.
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According to the researchers, options that phase the CTC in faster for some or all families with low incomes or a newborn child would concentrate benefits on the lowest income families, a sound investment in our nation’s future. Options that extend the credit to older children or increase the maximum credit would generally support families with middle and high incomes, generally costing much more than proposals focused on lower income families.

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Visit our legislation tracker to view and compare the latest CTC legislation in the 2025 TCJA debate.


If you have questions for the research team, please reply to this email. We’re happy to connect you.


Thanks,


- The Stakeholder Outreach team

U R B A N I N S T I T U T E

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www.urban.org




Urban Institute is a nonprofit research organization that believes in the power of evidence to improve people’s lives. Urban as an organization does not take policy positions but Urban’s independent experts are empowered to make recommendations based on their research.


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