Fewer NV families will qualify for child tax credit under Trump tax and spending bill

Though the bill increases the maximum amount of the tax credit per child, it also implements more restrictive income requirements, effectively reducing the number of eligible households. (Photo illustration by Getty Images)

Parents or guardians of about 175,000 Nevada children are already ineligible for the federal child tax credit, and an additional 35,000 Nevada children will lose eligibility under President Donald Trump’s tax and spending bill, according to a new analysis.

That’s a 17% reduction in the number of families who will be able to claim the credit. 

Though the legislation modestly increases the maximum amount of the tax credit from $2,000 to $2,200 per child starting in 2026, the bill also implements more restrictive income requirements, effectively reducing the number of eligible households.

The law also prohibits children who are U.S. citizens or legal permanent residents from receiving the credit if their parent or guardian lacks a Social Security number. 

The changes to the credit will render an estimated 1 in 3 children nationwide under age 17  ineligible for the full credit, according to a policy brief by the Center on Poverty and Social Policy at Columbia University.

“Nevada, unfortunately, is in the top 10 states of having the largest share of children left behind,” said Megan Curran, the policy director for the Center on Poverty and Social Policy. 

Under the child tax credit in effect prior to the stricter eligibility requirements, roughly a fourth of Nevada children – about 175,000 – have been ineligible, according to the center’s analysis.  

Under the tax and spending law passed by the Republican Congress and signed by Trump, a third of Nevada children — about 210,000 — are expected to be excluded from the credit starting in 2026.

The center provided Nevada Current an estimate of how many children could potentially be excluded from the tax credit under the new law by congressional district: 67,000 in CD 1, 39,000 in CD 2, 42,000 in CD 3 and 62,000 in CD 4.

“The child tax credit is another one of those small ways that we support families with the expenses of raising children,” said Elisa Cafferata, executive director of Children’s Advocacy Alliance in Nevada. “To make it harder to get that benefit and that support is just going to make it harder for families to do what they need to do to take care of their kids.”

‘Extremely concerning’

The child tax credit in its current form already excludes thousands of low-income families nationwide, and not all households qualify for the full $2,000 credit that has been in place. 

Under the revised income parameters, despite the tax credit’s higher maximum amount, those households that continue to qualify for the credit likely won’t receive as much of a credit as they were seeing under the pre-Trump version of the tax provision.

The credit is structured so that each additional child means a family has to earn more money in order to access the full credit. 

The structure, Curran said, flies in the face of logic. 

The American Rescue Plan Act of 2021, passed by Democrats in Congress and signed by Democratic President Joe Biden, temporarily extended and expanded the child tax credit. 

Not only did the legislation increase the maximum credit from $2,000 per child to $3,600 per child under 6 and $3,000 for children 6 to 17, it also made the credit fully refundable so low-income families that were previously ineligible could benefit, and households could choose to receive the benefit monthly.

Child poverty in the U.S. was cut in half over a single year.

“It was that combination of those two things that actually brought child poverty to the lowest level we’ve ever had on record in this country,” Curran said. “Hunger dropped. Families were better able to meet their expenses.”

The extension expired and efforts to continue those credits were blocked by every Republican in Congress, in addition to former Democratic U.S. Sen. Joe Manchin of West Virginia.  

“We have a very dramatic example of what a significant benefit a child tax credit provides to families,” Cafferata said, referring to the 2021 relief bill. “We immediately… lifted 44,000 children out of poverty” in Nevada. “Then that tax credit expired, and the number of children in poverty went back up, and now that’s that many more families struggling every day.”

There have been various proposals, including by some Republicans, to make the child tax credit more beneficial. Even Vice President JD Vance called for a $5,000 tax credit while on the campaign train. 

Instead the bill slightly increases the maximum credit per child to $2,200 while erecting more obstacles making it harder for families to receive it. 

A two-parent household with two children has needed to make $36,000 in order to qualify for the full tax $2,000 credit. The new law increases credit to $2,200. But to receive a full credit and that additional $200, the household must earn an additional $12,000 to meet a new $48,000 threshold, according to the center’s analysis of the tax credit provision.

For a single parent with two children, the household currently needs to make $28,500 to receive the maximum $2,000 tax credit. The threshold under the new law is $40,000 to receive a maximum of $2,200, according to the center.

The minimum wage in Nevada is currently $12 an hour or $24,960 a year. 

The center’s report notes the changes will disproportionately disqualify some demographics:

• 54% of American Indian or Alaska Native children; 
• 51% of Black children; 
• 44% of Latino children; 
• 65% of children with a female single parent; 
• 34% of children under age six; 
• 43% of children in large families; 
• 40% of children in rural areas.

Parents who lack a Social Security number have previously been able to claim a tax credit for children who are U.S. citizens or permanent legal residents. Those children are now excluded. 

There are an estimated 42,600 children in Nevada that are U.S. citizens and have undocumented parents, according to a joint analysis from the Brookings Institution and the Center for Migration Studies.

“These kids are citizens,” Cafferata said. “They should get the benefits of being American citizens. I think America does best when all our kids are able to thrive. This parsing out of benefits is going to, in the long term, not benefit this country.”

The Republicans’ multi-trillion-dollar domestic spending and tax cut package imposes steep cuts to Nevada’s biggest public safety net programs, including Medicaid and the Supplemental Nutrition Assistance Program (SNAP), while bolstering spending on immigration enforcement and extending the 2017 tax law that favors taxpayers with higher incomes.

The same families at risk of being excluded from the child tax credit because of the new requirements are also the same households at risk of losing Medicaid and food assistance, Curran warned. 

The changes to Medicaid are expected to begin in 2027, after the midterm elections, the combined components paint a dire outlook for the social safety net many families rely on, she said. 

“It’s important to look at each of the pieces of the bill individually, but also it’s important to look at their combined effect, particularly on kids,” Curran said.  “And the combined effect on kids is extremely concerning.”