By Ely Cole
Child Tax Credit Changes – and My Almost-Perfect Timing
As a US CPA specializing in individual tax filings and planning for over 20 years, people expect my own tax planning should be perfect. Unfortunately, not everything is under ones control.
When our first child was born on January 9, 2015, I remember telling my wife what a “missed opportunity” it was. If we’d had the baby just ten days earlier, we could have claimed the child as a dependent for the whole prior tax year. Obviously, healthy baby > tax savings, but still…
Fast-forward to December 30, 2024. Our latest baby arrives, and I’m feeling like I finally got it right. Dependent for the whole year, child tax credit in hand — perfect timing.
Or so I thought.
Enter the new BBB legislation. Among the changes:
- The Child Tax Credit will increase from $2,000 to $2,200 per child starting in 2025, with inflation adjustments from 2026 onward.
- The refundable portion (Additional Child Tax Credit) will also be indexed for inflation.
- And here’s the kicker: kids born between 2025 and 2028 will get an extra $1,000 “bonus” in a new tax-advantaged account.
Which means… if our baby had been born just two days later, we’d have qualified for that $1,000 bonus.
So, after years of missing the December 31 cutoff, I finally timed it “perfectly” — only to find out I was two days too early for the new benefit.
For those of you in Israel with U.S. tax filing requirements, these changes are worth noting. The regular CTC and ACTC amounts will go up, and the inflation adjustments should help a little over time. And if you’re expecting a child in the next few years, the 2025–2028 $1,000 bonus could be a nice extra.
While I couldn’t be happier with my healthy baby daughter and have no real complaints…an extra $1,000 could’ve bought a lot of diapers.