Here's one aspect of the new OBBB tax bill which parents of young children won't be so happy about:

Here's one aspect of the new OBBB tax bill which parents of young children won't be so happy about:

While the CTC (Child Tax Credit) was raised to $2,200, the ACTC (Additional Child Tax Credit), which is the refundable part of the child tax credit, is being reduced to $1,400 from $1,700. 

Technically, the Trump administration considers this a big win. Here's why: The pre-TCJA bill (pre-2017) refundable ACTC was only $1,000. This was set to expire. 

The new bill revived the original TCJA amount, using the final yearly increase to $1,400 (same as 2018-2021 without the special COVID additions for 2021), but did not include the additions of the Biden administration to $1,500 (2022), $1,600 (2023) and $1,700 (2024).

Why didn't they include the Biden administration's additional amounts? Hadn't they just done a rough inflation increase each year, not a super generous welfare hike which Trump doesn't like? 

Indeed the additional $100 per year was to compensate for inflation, roughly. But $100 was roughly $10-$50 more than an inflation increase. So cumulative that's roughly $115 added to the ACTC per CPI inflation rates in retrospect, nothing to do with an inflation increase.

So the Trump administration may not have wanted to include those amounts which they may see as too generous and welfare-like. So it reverted back to $1400. 

Beats me why they couldn't have at least increased it to a pure inflation adjusted amount for the 2025 tax year (around $1,632). 

Perhaps the reason is political optics: By rolling the ACTC back to the TCJA baseline, the Trump administration avoids conceding even a partial policy win to the Biden administration and prevents inflation-adjusted increases from becoming the new default baseline.