Several recent bills in Congress attempt to use the tax code to provide more support to low-income families. In this explainer, we cover efforts to change the Child Tax Credit, which families can use to offset a range of costs associated with raising children. (See our separate explainer on the Child and Dependent Care Tax credit, which targets child care costs specifically.) 

How would these bills help families, and how do they compare? We offer this summary to help spark dialogue on the Child Tax Credit and other areas of tax reform designed to help families. 

The federal Child Tax Credit (CTC) helps eligible families offset the costs of raising children. Since it was first established in 1997, millions of American parents have claimed this credit, and it has become a key component of the federal government’s approach to supporting families with children.

The CTC has been expanded and revised over time. Although it was temporary, the American Rescue Plan Act (ARPA) significantly raised the amount tax filers could claim, eliminated credit caps for families with multiple children, switched from annual to monthly payments, and made the credit fully refundable to low-income families who owed little or no federal tax to qualify for the full amount. The expansion helped lift millions of children out of poverty and nearly cut the child poverty rate in half before it expired at the end of 2021.

The Tax Relief for American Families and Workers Act of 2024

In January 2024, Sen. Ron Wyden (D-OR) and Rep. Jason T. Smith (R-MO) introduced bipartisan legislation to extend the Child Tax Credit and help more low-income families receive the full credit amount. While the bill passed in the House, it stalled in the Senate. The bill

• Establishes a “lookback” provision: The bill allows families to use earned income from the current or previous tax year when calculating the credit. This creates flexibility and protects families from having their tax credit reduced if their earnings drop or they face temporary financial hardship. 
• Makes the full amount of the credit refundable: The bill addresses the refundability cap, which happens if the Child Tax Credit is bigger than the amount of tax owed. In that case, families receive only part of the credit as a refund—the difference between those two amounts—with a cap of $1,700. By gradually boosting the refundable portion of the credit that low-income families can claim to $2,000, the bill effectively eliminates the refundability cap and allows them to receive the full amount of the credit as a refund. 
• Increases the amount families can receive per child: By modifying how the credit is phased in to allow low-income families to receive a refundable tax credit for each child, the bill effectively removes a current provision that limits how much low-income families receive per child. This move ensures that the credit is applied fairly to low-income families with multiple children, just like those in higher-income families.
• Accounts for inflation: The bill indexes the maximum credit amount and refundability cap to inflation, preventing its value from diluting over time.

Family Income Supplemental Credit (FISC) Act (2025)

Rep. Jared Golden (D-ME) introduced legislation in February 2025 to replace the federal Child Tax Credit with monthly payments to families that begin during pregnancy and extend until the child turns 18. The bill 

• Distributes monthly payments: It provides a monthly per-child benefit that would be processed by the Social Security Administration, instead of an annual lump sum credit through the tax code. Payments would start in the fifth month of pregnancy, and maximum benefits would taper as the child ages.
• Begins decreasing payments at a lower income threshold: The bill phases out payments at a lower annual income than current Child Tax Credit provisions. Benefits would decrease by $200 for every $1,000 earned above a yearly income of $125,000 for single filers and $250,000 for married couples filing jointly.
• Creates a marriage bonus: The bill offers a 20% bonus to married couples who file taxes jointly. 
• Provides a grace period: The credit is still available for parents for up to one year after losing their job because benefits are calculated based on income from the prior tax year, preventing a drop in benefits due to a temporary loss of income.

Family First Act (2025)

In January 2025, Rep. Blake Moore (R-UT) introduced legislation to expand the maximum tax credit available to families and scale benefits according to children’s age. The bill also creates a new tax credit for pregnant mothers. Key provisions:

• Increases maximum credit: The bill raises the maximum credit from $2,000 to $4,200 per child from birth to age five and to $3,000 per child aged 6 to 17.
• Establishes a tax credit during pregnancy: Creates a $2,800 credit for pregnant mothers.
• Makes phase-in adjustments: The bill accelerates the phase-in of the credit, beginning with the first dollar of adjusted income and increasing proportionally up to $20,000, meaning families receive more of the credit at lower income levels than under the current policy. Families must earn at least $20,000 to receive the full child tax credit or $10,000 for the full pregnancy credit.
• Modifies or eliminates other family tax provisions: The bill also reforms other areas of the tax code by scaling back the Earned Income Tax Credit (EITC) and eliminating the Head of Household filing status, the Child and Dependent Care Tax Credit (CDCTC), and the exemption for dependents. It would also make the cap on state and local tax (SALT) deductions permanent.

A comparative look at recent Child Tax Credit proposals