2025 Tax Law Updates: Bigger Child Tax Credit + Standard Deduction Locked In
Big news for families and taxpayers in 2025: the One Big Beautiful Bill Act (OBBBA) made some major changes that will put more money back in your pocket. Two of the biggest updates? The Child Tax Credit and the Standard Deduction.
Let’s break it down.
📌 The Child Tax Credit is Increasing
If you’re raising a family, here’s some welcome news:
- 2024: $2,000 per child
- 2025: $2,200 per child
- 2026 & beyond: Indexed for inflation (meaning it will continue rising with the cost of living)
This is a big win, because the Child Tax Credit was scheduled to shrink after 2025. Thanks to the OBBBA, it’s not only protected—it’s been expanded.
👉 Translation: More money in your pocket, and more predictability when planning your family’s finances.
📌 The Standard Deduction is Here to Stay (and Grow)
Before this law passed, the larger standard deduction created under the 2017 Tax Cuts and Jobs Act (TCJA) was set to expire after 2025. That would have meant higher taxable income for millions of households.
Now? The OBBBA has locked it in permanently—and added a small increase starting in 2025.
| Filing Status | Old (TCJA) | New (OBBBA – 2025) |
| Single | $15,000 | $15,750 |
| Head of Household | $22,500 | $23,625 |
| Married Filing Jointly | $30,000 | $31,500 |
| Married Filing Separately | $15,000 | $15,750 |
That means:
- More savings for households
- Protection against the “tax hike” that was coming in 2026
- A little extra bump each year moving forward
Why This Matters
These updates give families and taxpayers something rare in tax law: stability.
- Families get a stronger, inflation-adjusted Child Tax Credit.
- Households can count on a permanent, slightly higher standard deduction.
Together, these changes reduce tax uncertainty, give you more room in your budget, and help you plan with confidence.
✅ Key Takeaways
- The Child Tax Credit rises to $2,200 per child in 2025 and will increase with inflation starting in 2026.
- The Standard Deduction is permanent and slightly higher beginning in 2025.
- The OBBBA reversed what would have been major tax hikes for families after 2025.
💡 Planning Tip: With these changes, it’s a good time to revisit your tax strategy for 2025 and beyond. The rules have shifted—make sure your planning does too.
📲 Follow for more updates (or message me directly) so you can stay ahead of tax law changes that impact your family and your business.