OBBA and the Child Tax Credit: What Parents Need to Know

The One Big Beautiful Act (OBBA) makes some notable updates to the Child Tax Credit (CTC), but parents will need to be patient before seeing the full benefit.

What Changed?

Starting in 2026, the Child Tax Credit will increase to $2,200 per child (up from the current $2,000). This means parents will eventually get either:

• A little more in their paychecks, if they adjust their W-4 to claim dependents, or

• An extra $200 per child back at tax time.

The Catch

• The increase doesn’t kick in until 2026, so there’s no immediate boost for 2025.

• The credit remains partially refundable, but the exact refundability thresholds still depend on income.

• The change is relatively modest compared to the expansions seen during the pandemic years.

Why It Matters

For families with multiple children, even a $200 bump per child can add up. While not a game-changer, the OBBA ensures the Child Tax Credit keeps pace—at least a little—with inflation and rising family costs.

Bottom line: The OBBA provides a modest win for parents, but the real relief won’t be felt until 2026. Families should plan accordingly.

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