The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4th, 2025. One key change included as part of the tax bill is the expansion and enhancement of the Child & Adoption Tax Credit—an updated tax provision aimed at providing greater financial support to families with dependent children and those who adopt. These changes apply to tax years 2025 through 2028 and include increased credit amounts, broader eligibility, and new refundable components. Below are key details regarding who qualifies, how much can be claimed, and how the new rules may benefit families across the country.
What has changed with the Child Tax Credit?
- Increased Credit Amounts: The maximum credit amount has increased to $2,200 for the 2025 tax year and will be indexed for inflation in future years
- Phaseout Thresholds: Permanent phaseout thresholds were established. $200,000 for single filers and $400,000 for joint married filers.
- Social Security Numbers: A social security number is required for the taxpayer (at least one spouse for joint filers) who is claiming the credit for the child.
What has changed with the Adoption Tax Credit?
- Refundable Portion of the Credit: Up to $5,000 of the adoption tax credit is now refundable and will be indexed for inflation in future years.
- Maximum Credit: The maximum adoption credit amount has been increased to $17,280.
If you have any questions, or if you would like to schedule an appointment to understand the impact of these changes on your situation, please do not hesitate to contact our team. Appointments can be scheduled online by visiting our website at www.ongandcompany.com.