Quick Answer
The One Big Beautiful Bill increased the child tax credit from $2,000 to $3,600 per child under 6 and $3,000 per child ages 6-17. The credit is now fully refundable with no earned income requirement, and phase-out thresholds increased to $150,000 (single) and $300,000 (married filing jointly).
Best Answer
Robert Kim, Tax Return Analyst
Parents with children who want to understand the new credit structure and how it affects their tax situation
What changed with the child tax credit amounts?
The One Big Beautiful Bill Act of 2025 substantially expanded the child tax credit in three major ways. First, credit amounts increased significantly: children under 6 now qualify for $3,600 per year (up from $2,000), while children ages 6-17 receive $3,000 per year (also up from $2,000).
Second, the credit became fully refundable with no earned income requirement. Previously, families needed at least $2,500 in earned income to receive any refundable portion, and the refundable amount was limited to 15% of earnings above $2,500. Now, even families with no income can receive the full credit as a refund.
Third, income phase-out thresholds increased dramatically to $150,000 for single filers and $300,000 for married couples filing jointly (up from $75,000 and $150,000 respectively).
Example: Family with two children
Consider the Johnson family: married filing jointly with income of $85,000 and two children (ages 4 and 8). Here's how their credit changed:
Under old rules (2025 tax year):
Under new rules (2026 tax year):
Result: The Johnsons receive $2,600 more in child tax credits.
How the phase-out works under new rules
According to IRS guidance on the One Big Beautiful Bill implementation, the credit phases out at $50 per $1,000 of income above the threshold. Here's how this affects different income levels:
Key changes for different family situations
Families with no or low income: The biggest winners are families with little to no earned income. A single parent with no income and one child under 6 now receives a $3,600 refund, compared to $0 under the old system.
Middle-income families: Families earning between $50,000-$200,000 see substantial increases in their credits without phase-out concerns. A married couple with $120,000 income and three children (ages 3, 7, 12) receives $9,600 in credits compared to $6,000 previously.
Higher-income families: Families who previously lost the credit due to income limits may now qualify. The phase-out now starts at much higher income levels, benefiting families earning up to $300,000 (married) or $150,000 (single).
What you should do
Review your 2026 tax situation with the new credit amounts in mind. If you have children and haven't been claiming the full credit, or if your income previously put you above the phase-out threshold, you may be eligible for significantly larger refunds.
For families who receive the credit as advance payments, adjust your monthly payment amounts to reflect the new credit levels. The IRS Child Tax Credit Update Portal allows you to modify your advance payment preferences.
Key takeaway: Most families with children will see their child tax credit increase by $1,000-$1,600 per child, with the credit now fully refundable regardless of income level and higher phase-out thresholds protecting more middle and upper-middle-class families.
*Sources: [IRS Publication 972](https://www.irs.gov/pub/irs-pdf/p972.pdf), One Big Beautiful Bill Act of 2025*
Key Takeaway: The child tax credit increased to $3,600 (under 6) and $3,000 (ages 6-17), is now fully refundable, and phases out at much higher income levels ($150k single, $300k married).
Child Tax Credit comparison between old and new rules
| Category | Old Rules (2025) | New Rules (2026) | Increase |
|---|---|---|---|
| Children under 6 | $2,000 | $3,600 | $1,600 |
| Children ages 6-17 | $2,000 | $3,000 | $1,000 |
| Phase-out (Single) | $75,000 | $150,000 | $75,000 higher |
| Phase-out (Married) | $150,000 | $300,000 | $150,000 higher |
| Refundable amount | Limited (15% above $2,500) | Fully refundable | No limits |
| Earned income requirement | $2,500 minimum | $0 minimum | No requirement |
More Perspectives
Michelle Woodard, Tax Policy Analyst
Families with higher incomes who previously lost the child tax credit due to phase-out rules
How higher income thresholds affect wealthy families
The One Big Beautiful Bill's most significant impact for high earners is the dramatic increase in phase-out thresholds. Previously, married couples earning more than $150,000 began losing the credit, with complete phase-out around $240,000. Now, phase-out doesn't begin until $300,000 for joint filers.
Example: High-earning family scenario
Consider the Chen family: married filing jointly, $280,000 income, two children (ages 5 and 9).
Under old rules:
Under new rules:
Strategic considerations for high earners
According to IRS guidance, the new structure creates planning opportunities. Families earning just above the new thresholds might benefit from income timing strategies. For instance, married couples earning $310,000 could defer $10,000 of income to stay under the $300,000 threshold, potentially saving thousands in lost credits.
The fully refundable nature also matters for high earners with significant withholding or estimated payments. If your total tax liability is covered by withholding but you qualify for the child tax credit, you'll receive the credit as a refund rather than just reducing your tax owed.
Key takeaway: High-earning families who lost the entire child tax credit under previous rules may now qualify for the full $3,000-$3,600 per child credit, representing potential tax savings of thousands of dollars annually.
*Sources: One Big Beautiful Bill Act of 2025, IRS Publication 972*
Key Takeaway: High earners benefit most from the increased phase-out thresholds, with families earning up to $300,000 (married) now eligible for the full credit.
Robert Kim, Tax Return Analyst
Families with children spanning different age brackets who need to understand varying credit amounts
Understanding the age-based credit structure
The One Big Beautiful Bill created two distinct credit tiers based on age, which particularly affects families with children spanning multiple age groups. Children under 6 receive $3,600, while children ages 6-17 receive $3,000. This $600 difference reflects the higher costs associated with younger children's care and development needs.
Example: Large family with mixed ages
The Rodriguez family has four children: ages 3, 7, 11, and 15. Their total credits:
Under the previous system, this family would have received $8,000 ($2,000 × 4 children), representing a $4,600 increase.
Age transition planning
Families should be aware that a child's credit amount changes when they turn 6. If your child turns 6 during the tax year, they qualify for the higher $3,600 amount for the entire year. However, once they turn 18, they no longer qualify for any child tax credit.
Important timing note: According to IRS Publication 972, the child's age is determined as of December 31st of the tax year. A child born in December 2026 qualifies for the full $3,600 credit for the entire 2026 tax year.
Key takeaway: Families with children in both age brackets should expect significant credit increases, with the greatest benefit going to families with children under 6 who receive the maximum $3,600 per child.
*Sources: IRS Publication 972, One Big Beautiful Bill Act of 2025*
Key Takeaway: Families with mixed-age children see varying increases: $1,600 more per child under 6, and $1,000 more per child ages 6-17.
Sources
- IRS Publication 972 — Child Tax Credit and Credit for Other Dependents
- One Big Beautiful Bill Act of 2025 — Federal legislation expanding child tax credit provisions
Related Questions
Reviewed by Robert Kim, Tax Return Analyst on February 28, 2026
This content is for educational purposes only and is not a substitute for professional tax advice. Consult a qualified tax professional for advice specific to your situation.