10
Loading video...
By Aliss Higham
Reporter
0
Share
Newsweek is a Trust Project member
See more of our trusted coverage when you search.Prefer Newsweek on Googleto see more of our trusted coverage when you search.
More than 19 million children will receive less than the full federal Child Tax Credit in 2026 because their families earn too little, according to a new analysis.
The estimate from the Center on Budget and Policy Priorities, a left-leaning think tank, suggests that 19.3 million under-17s, or more than one in four nationwide, will receive only part of the federal $2,200-per-child credit or no credit at all.
The findings come after the Republican reconciliation law enacted in 2025 permanently raised the maximum Child Tax Credit from $2,000 to $2,200. However, the law retained a separate, lower limit on how much lower-income families can receive as a refund.
Read More on News
That refundable maximum is $1,700 per child for 2026, creating a $500 difference between the amount available to many lower-income households and the full credit provided to families earning more.
How the Child Tax Credit Rules Work
The federal Child Tax Credit is a federal tax benefit intended to help families cover the costs of raising children under age 17. Unlike families with higher incomes, lower-income households do not automatically qualify for the full amount for each eligible child.
Under the current formula, families receive no Child Tax Credit on their first $2,500 of earnings. Above that threshold, the refundable portion of the credit gradually increases at a rate of 15 cents for every additional dollar earned.
That phase-in applies largely at the family level rather than separately for every child, meaning households with several children can receive the same total amount as a one-child family with comparable earnings, or only a modestly larger credit.
The CBPP reports a single parent with two children must earn at least $34,150 in 2026 to qualify for the full $4,400. That is equivalent to earning about $16.42 an hour while working 40 hours every week of the year without unpaid leave, according to CBPP. A married couple with two children would have to earn at least $42,200.
The effect can be substantial for families working in lower-paid or part-time jobs. CBPP offered the example of a single parent earning $16,000 while raising a 3-year-old and a 7-year-old. Under the current rules, that family would receive a total credit of $2,025, which is less than half the full $4,400 available for two children.
The report said the 2025 law did not increase that family’s credit from what it would have received under the previous rules, despite raising the maximum amount for households able to claim the full benefit.
Which Children Are Most Affected?
The number of children receiving less than the full credit varies widely by state, with the largest totals concentrated in the country’s most populous states.
California has an estimated 2.212 million affected children, narrowly ahead of Texas with 2.193 million. New York has about 1.183 million, followed by Florida with 1.171 million.
Ohio has an estimated 749,000 children receiving less than the full credit, while Georgia has 737,000 and Pennsylvania has 705,000.
The current structure also has an unequal impact across racial and ethnic groups. CBPP estimates that more than half Black children receive less than the full amount, along with more than one in three Latino children and more than one in three American Indian and Alaska Native children.
Millions of children from other groups are also affected. Roughly one in five white children and more than one in six Asian children receive less than the full credit because of their families’ incomes.
The vast majority of children missing out on the full benefit are from working families, the report said. Their parents include childcare workers, teaching assistants, nursing assistants, home health aides, cashiers and construction workers, and an estimated 776,000 affected children have parents who are veterans.
Rural Families Face a Larger Gap
Children living outside metropolitan areas are particularly likely to receive a reduced credit, CBPP reports. More than one in three rural children under 17 receive less than the full $2,200, compared with more than one in four children living in metropolitan areas.
CBPP linked that difference largely to lower earnings in rural communities, where median pay in 2024 was approximately 18 percent below the level in metropolitan areas.
Among rural children receiving a reduced credit, about 56 percent are white, 16 percent are Latino, 15 percent are Black and 8 percent are American Indian or Alaska Native.
Proposals to Expand the Credit
CBPP is calling on Congress to make the Child Tax Credit fully refundable, meaning lower-income families could receive the same $2,200 per child as households with larger tax liabilities.
Congress temporarily adopted that approach through the American Rescue Plan Act for the 2021 tax year. That law also increased the maximum credit to $3,600 for children under six and $3,000 for children between six and 17. Together with other pandemic assistance, the expanded credit helped reduce child poverty to a record low in 2021.
Other proposals would stop short of full refundability but alter the phase-in rules.
A bipartisan bill introduced in 2024 by Republican Representative Jason Smith and Democratic Senator Ron Wyden would have calculated the 15 percent phase-in separately for each child. It also would have increased and eventually removed the lower refundable-credit limit.
The measure passed the House with support from 169 Republicans but was blocked by Senate Republicans. CBPP estimates it would have expanded the credit for more than 80 percent of children missing the full benefit in its first year.
Under those provisions, the single parent earning $16,000 with two children would have received $4,050 rather than $2,025.
A separate bipartisan proposal from Senators Todd Young and Maggie Hassan would allow the credit to begin phasing in with a family’s first dollar of earnings, eliminating the existing $2,500 threshold. That bill is making its way through the legislative process, currently awaiting review by the Senate Finance Committee.
Contact Newsweek editors for this story: Ben Kelly and Robert Greenall
View 0 Comments
Submit Correction
View Editorial & AI Guidelines