Trump’s Tax Cut Bill passes major committees and moves to the House
President Donald Trump’s sweeping tax bill passes major committees and moves to the House vote.
The “big and beautiful tax bill” has progressed through Congress, but how big and beautiful is it for you?
With Trump’s big victory, the bill won approval from the main Congressional committee on May 18th, moving forward towards a possible passing in the House later this week. This law is far from a transaction that has still been made. Once you pass through the gauntlet of the house, teeth It is expected to go through committee and floor voting in the Senate. Policy details may be tweaked at any point along the way.
But if the bill passes as is (probably longshot), it will include higher standard deductions, particularly for seniors, increased child tax credits (CTC), and many other items that will fulfill President Donald Trump’s campaign promises for Americans.
Expanded child tax credits may help families in particular. The Tax Policy Center estimates that the larger child tax credit will provide an additional $22.9 billion in benefits to families with children in 2026.
What are the details about the new Child Tax Credit?
Here’s how the new child tax credit under one big beautiful bill law works:
- The child tax credit will increase to $2,500 per child through 2028.
- From 2028 onwards, the full child tax credit will fall to $2,000, but it has been indexed into inflation.
- Applicants must have a Social Security number to qualify for credit.
- The maximum refundable portion of the child’s tax credit does not exceed $1,400 per qualifying child. Up to $1,700 can be refunded at this time.
Who was the proposed child tax credit benefit?
While most families with children should benefit, experts say there is more to it than other families.
The plan “mainly will benefit middle- and high-income families who are owed additional income taxes, even after receiving a $2,000 CTC,” the Tax Policy Center said. “Low-income families who are restricting CTC in stages will not benefit further from this option.”
Families who benefit from the change will see an average increase in credit between $700 and $800, the Tax Policy Center said. The lowest-income beneficiaries said they would receive an average increase in profits of just over $350.
Additionally, when parents submit jointly and request tax cuts for eligible children, millions of families cannot benefit at all due to the new requirement that parents have a valid Social Security number, experts said.
According to the Center for Immigration Research, an estimated 4.5 million children, who are citizens or legal permanent residents, will be disqualified for CTC due to the bill’s requirements that both parents have a Social Security number, even if both parents have a Social Security number. These children are currently eligible for CTC.
“This exclusion applies to families with one parent being a citizen and the other parent being legally in the country but without a Social Security number,” the budget and policy priorities said.
What else should Americans care about in tax bills?
Below are some of the other items that could help Americans save money from the tax proposal released on May 12th.
- Ensure that 2017 tax cuts and employment, including a $2,000 child tax credit, will work permanently. CTC will return to $1,000 at the end of the year if not extended.
- Individuals increase $1,000, head of household $1,500, and married couples increase $2,000
- Provided Americans over the age of 65 in a given income will limit the additional deduction of $4,000 per filer. This is supported by AARP, a non-profit, nonpartisan organization that advocates the needs and benefits of people over 50, in lieu of Trump’s campaign promise to eliminate taxes on social security income.
- Give each child $1,000 for parents who open under the name “Money Account for Growth and Investment,” also known as “MAGA” savings accounts.
- Clean Energy Tax Credit Expire Early – This year
Is it too early to plan a tax bill?
Tax proposals make tax planning difficult for several reasons. Both the fate and the final bill are still pending, with some proposals retroactive by January 1, 2025, while others are effective in 2026 or future years.
But Richard Pont, a certified public accountant in San Francisco, suggests a few things people might consider under the first legislation. They are:
- Buy an electric vehicle this year as your $7,500 clean vehicle credit expires in 2025 rather than 2032
- The tax credit expires this year rather than 2034, so purchase clean energy equipment such as solar and wind energy.
- Make an energy efficient home improvement eligible for a 30% credit or this credit expires this year rather than 2032, so you will be subject to a home energy audit
- Hold on to your money. “In 2026, there’s no need to give big gifts to family and friends anymore as real estate tax exemptions won’t decrease,” Pong said.
Medora Lee is a money, market and personal finance reporter for USA Today. mjlee@usatoday.com and Subscribe to our free daily money newsletter Personal finance tips and business news every Monday to Friday.
