Details of Public Law 119-21, section 70104 , One Big Beautiful Bill Act

The provision makes permanent the child tax credit modifications established under the Tax Cuts and Jobs Act (Public Law 115-97, section 11022). For taxable years beginning after December 31, 2024, the amount of child tax credit is increased to $2,200 per qualifying child. The credit is further modified to permanently provide for a $500 nonrefundable credit for qualifying dependents other than qualifying children. The provision generally retains the present-law definition of dependent.

Under the provision, the maximum amount of the credit that is refundable may not exceed $1,400 per qualifying child. The maximum amount of the credit that is refundable is indexed for inflation using the Chained Consumer Price Index for All Urban Consumers (C–CPI–U) for taxable years beginning after December 31, 2024. Additionally, the provision provides that, in order to receive the child tax credit (i.e., both the refundable and non-refundable portion), a taxpayer must include a social security number (SSN) for each qualifying child for whom the credit is claimed on the tax return. For these purposes, an SSN must be issued before the due date for the filing of the return for the taxable year.

Further, the provision retains the present-law age limit for a qualifying child. Thus, a qualifying child is an individual who has not attained age 17 during the taxable year.

Finally, the provision makes permanent the modified adjusted gross income phaseout thresholds. The credit begins to phase out for taxpayers with adjusted gross income in excess of $400,000 (in the case of married taxpayers filing a joint return) and $200,000 (for all other taxpayers). These phaseout thresholds are not indexed for inflation.

The amount of the child tax credit is indexed for inflation using the C–CPI–U for taxable years beginning after December 31, 2025.

To claim the child tax credit, the taxpayer must have a valid social security number on the return for the taxable year. Additionally, the SSN must be issued to a citizen of the United States. The omission of a valid SSN will be treated as a mathematical or clerical error.

California does not conform to the child tax credit under IRC section 24 and has no comparable credit.

California has a refundable Young Child Tax Credit (YCTC). The YCTC is allowed to an eligible individual who has been allowed the California Earned Income Tax Credit (EITC), has at least one qualifying child for the EITC, and has one qualifying child under the age of six years old as of the last day of the year. The maximum amount of the refundable credit is $1,000 and phases in at $25,000 of earned income and phases out at $30,000.

Under the Administration of Franchise and Income Tax Law (AFITL), FTB treats specified errors identified on the return during processing as math errors, which includes not providing a valid identification number as required to claim a dependent exemption tax credit, earned income tax credit, young child tax credit, or foster youth tax credit. California doesn’t conform to the definition of mathematical or clerical error under IRC section 6213. As a result, California does not conform to the changes made by this provision related to IRC section 6213.