Defunding Planned Parenthood, border security: 5 provisions in the Big Beautiful Bill

2. Extending the child tax credit and employer-provided childcare credit

Section 110004 of the House version of the legislation and Section 70104 of the Senate version contain a provision extending the expanded child tax credit, which is set to expire on Jan. 1, 2026. The expanded child tax credit currently in place allows parents of children under the age of 17 to deduct $2,000 from their taxes, up from the previous $1,000. 

The House version of the Big Beautiful Bill further expands the child tax credit to $2,500 from 2025 through 2028, before it's scheduled to revert to $2,000 in 2029, whereas the Senate version permanently increases the child tax credit to $2,200. In addition to the expansion of the child tax credit, the legislation increases the employer-provided childcare credit from 25% of the qualified childcare expenditures to 40% in most cases and 50% in the case of an eligible small business. 

Under current law, the amount of the employer-provided childcare credit is equivalent to the sum of the cost of 25% of the qualified childcare expenditures and 10% of the qualified childcare resource and referral expenditures. The 10% figure for expenses in the latter category is not expected to change.

The legislation increases the maximum dollar amount of the employer-provided childcare credit from $150,000 to $500,000 in most cases and $600,000 in the case of an eligible small business.