The ambitious tax plan called “The One, Big, Beautiful Bill” was recently passed by the US Congress. It was pushed by Republican lawmakers and backed by President Donald Trump.
One of the most important parts of this bill is the increase of the Child Tax Credit (CTC), which will help more than 40 million American families. It is the biggest tax cut in the history of the country.
How much more will the Child Tax Credit be?
With the passing of the “Big Beautiful Bill,” the Child Tax Credit goes up to $2,500 per child. This is a permanent increase that builds on temporary increases made during earlier tax reforms. The earlier credit, which was $2,000 per child, was a lot less than this amount.
Also, the new credit is now forever, which gives working families more financial security. The need for a Social Security number is also kept in place to make sure that the income only goes to citizens and legal residents.
Who will benefit?
The new credit is meant to help families with low and middle incomes, especially those that make less than $100,000 a year. After taking into account the child credit and other tax breaks, the House Ways and Means Committee says that these families will get a tax cut of about $1,300.
Families making between $15,000 and $30,000 a year will see their taxes cut by up to 21%, which is the biggest cut of any income group.
The Big Beautiful Bill also includes other tax breaks.
Along with raising the CTC, the “Big Beautiful Bill” includes a number of other changes that are meant to make taxes easier for workers:
- 91% of taxpayers will gain from a permanent increase in the standard deduction.
- Millions of hourly workers will make more money because tips and extra won’t be taxed.
- Child care credits and paid leave tax credits should be expanded to help parents who work.
- Health and school savings accounts are now easier to get into, and there are even new “Trump” savings accounts for children from birth.
Projected economic impact
Supporters of the project say that these changes will not only lower taxes but also help the economy grow. It is thought that the package will create up to one million new jobs a year and raise real pay for each worker by up to $7,200.
Also, because of tax cuts and economic growth, the average family of four will have an extra $10,900 a year.
The Big Beautiful Bill is a big change in U.S. economic policy. Its main goal is to help working families. Millions of families will get direct help from the $2,500 rise in the Child Tax Credit. Other steps are also being taken to strengthen the family economy.
While the political debate rages on, this tax package is already causing parents, workers, and small businesses to have positive expectations. They want more security and buying power in a tough economic environment.
