Thank you to our U.S. Senators Marsha Blackburn and Bill Hagerty, as well as Rep. Chuck Fleischmann, for supporting the Child Tax Credit (CTC) when passing the “One Big, Beautiful Bill Act” earlier this month. That federal legislation raised this important tax credit from $2,000 to $2,200 per child, while also making it permanent and indexing it for inflation.
The Child Tax Credit allows eligible taxpayers to receive a credit for each of their qualifying dependent children.
For years, the CTC has been a way for the federal government to recognize the significant work and expense involved in starting a family and raising children.
The CTC has become a way for the federal government to show support for working families, particularly given the rising costs to raise a family. With the credit originally set to expire this year, adjustments to the CTC were necessary in order for families to continue to benefit from this important credit.
Expanding the CTC is one of the most effective and meaningful ways that the federal government can invest in building strong families in our country. Some in Congress have introduced legislation to further raise the CTC level, and Vice President Vance has even proposed the CTC be doubled to $5,000 per child. Hopefully Congress will continue to evaluate these CTC proposals.
The recent Act also made important enhancements to the Adoption Credit for families with children who are adopted by making the adoption tax credit partially refundable up to $5,000 and indexed for inflation. Current federal law only allows for a non-refundable adoption tax credit, where eligible, for qualified adoption expenses. Providing financial assistance through the Adoption Credit (and the CTC) can go a long way in further supporting Tennessee families with children, including those being built through adoption.
Though there were many disagreements about certain provisions of the Big Beautiful Bill Act, the Child Tax Credit enhancements seemed to be some of the most popular tax changes. Let’s hope Congress will continue to explore additional ways to support working parents and families.
Robert Batson