35% of KY children would not qualify for full tax credit under Trump spending bill
The number of Kentucky children who qualify for a tax credit intended to help lift families out of poverty would decrease under a President Donald Trump-backed federal spending bill that passed through the U.S. Senate on Tuesday, according to the Center on Poverty and Social Policy at Columbia University.
There are two versions of the bill, which Trump calls “The Big, Beautiful Bill” — the Senate version, which increases the maximum child tax credit amount from $2,000 to $2,200, and the U.S. House version, which increases it $500 before reverting to $2,000 in 2028.
But both increase the income required to obtain the full tax credit: According to Columbia, under the current tax credit, a family with two children filing jointly can be eligible for the full credit if the family’s income is at least $36,000. But under the proposed Senate bill, that income threshold would increase to $41,500.
According to the latest report from Columbia published Wednesday, the Senate version increases from 25% to 28% — or 17 million to 19 million children nationwide — who are not eligible for the full credit.
The data is worse in Kentucky, where child poverty remains stubbornly high — one in five children in the state lives in poverty, according to the 2025 KIDS COUNT Data Book.
Under the Senate bill, 35% of Kentucky children would not be eligible to receive the full credit, the fifth-highest rate of any state in the U.S., according to Columbia.
And even fewer children would be eligible in parts of the state where child poverty rates are higher: Jason Bailey, executive director of the Kentucky Center for Economic Policy, a non-partisan research organization, said 53% of the kids in the 5th Congressional District, which includes much of Southern and Eastern Kentucky, would not receive the full credit.
“It’s really not expanding a benefit for those who most need it,” Bailey said.
The child tax credit is part of Trump’s sweeping domestic policy plan that would also extend his 2017 tax cuts, slash funding for programs such as the Supplemental Nutrition Assistance Program and Medicaid, and increase spending on border security, defense and space exploration.
Terry Brooks, executive director of Kentucky Youth Advocates, said the child tax credit is not a political matter.
“The question, frankly, is how much Congress cares about childhood poverty,” Brooks said.
History of the child tax credit
Established in 1997, the child tax credit was designed to reduce tax liabilities for families with kids. At the time, it was non-refundable, meaning a person could get their taxes down to zero, but the government would not pay out a refund for the credit beyond that.
The credit was expanded over time to include refundable components, but only for some families. The credit started as $500 per child in 1997, then $1,000 in 2001, and, under Trump’s 2017 Tax Cuts and Jobs Act, it increased to $2,000 per child.
The credit increased again during the COVID-19 pandemic, to $3,000 for children younger than 18 and $3,600 for children younger than 6, according to the U.S. Department of the Treasury.
And the payments were made monthly, rather than annually, which Bailey said provided safety for low-income parents.
According to U.S. Census Bureau data released in 2022, child poverty decreased from 9.7% in 2020 to 5.2% in 2021.
“We saw the child poverty rate cut in half because of that,” Bailey said. “But then it went away.”
But as pandemic-era aid programs began to retreat, so did the child tax credit amount.
The big spending bill would increase its maximum value again, but experts note it’s not available to families who need it most.
“That $500 increase in the credit is not flowing to the kids in the lowest-income families who are the most at risk of losing Medicaid,” said Sophie Collyer, research director at the Center on Poverty and Social Policy at Columbia University. “It’s instead flowing to middle- and higher-income families.”
Senate bill’s ID change would cut off 2 million kids
Under current law, families are eligible for the tax credit if one of their parents has a Social Security number or an Individual Taxpayer Identification Number.
But under the new bill, a temporary ID number for a non-citizen or legal permanent resident would no longer be accepted.
The Senate bill proposes that, for parents with joint tax returns, at least one parent must hold a Social Security number.
James Ziliak, chair of the microeconomics department and founding director of the Center for Poverty Research at the University of Kentucky, said about 2 million children across the country will likely lose eligibility for the tax credit if that change holds upon the bill’s passage in the House.
“That means fewer Kentuckians are eligible for the maximum credit, the way it’s structured,” Ziliak said. “We have lower earnings relative to the average state.”
Inequity across states
A supplementary analysis by Columbia shows that under the Senate bill passed on Tuesday, 28% of children in 22 states would not receive the full child tax credit.
States in the South represent the most significant share of children who aren’t eligible for the full tax credit — with Mississippi (40.6%), Louisiana (38.2%), New Mexico (38.2%) and Alabama (35.1%) having the highest percentages.
Even in states with higher levels of workforce participation, wages vary.
The credit is designed to help lift families out of poverty, but linking it to a minimum income requirement excludes some families who still need assistance, Collyer said.
In recent years, several states have adopted their own state-level child tax credit to supplement the one offered by the federal government.
As of 2013, many states offered such a credit, according to the Institute on Taxation and Economic Policy: California, Colorado, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Oregon and Vermont.
Kentucky’s attempt at a child tax credit
State Sen. Reggie Thomas, D-Lexington, said two categories in Kentucky may be left behind by the tax credit expansion: people who live in areas with the highest rates of unemployment, including Eastern Kentucky, and children of color.
“This (the new bill) is going to harm more families than it helps,” Thomas said. “Why would we want to go in the opposite direction?”
Thomas supported a proposal in February from Sen. Cassie Chambers Armstrong, D-Louisville, to establish a refundable Kentucky child credit for taxpayers with qualifying children younger than 6.
The bill, Senate Bill 47, didn’t receive a hearing, but Thomas said he hopes she will propose it again next year.
Armstrong said she aims to mirror what other states have established, ensuring “the resources are going to support the families most in need.”
Still, Armstrong said there are barriers to passing a state-level bill in Kentucky.
“When lawmakers see the number of doing a child tax credit upfront, it looks like a big number and it looks like something that would be difficult to pay for,” Armstrong said.
For the Senate version of the bill, the Congressional Budget Office estimated the child tax credit costs hundreds of billions of dollars.
But dealing with the downstream effects of child poverty is more expensive, Armstrong said.
“For kids that grow up in poverty, there are health impacts that the state ends up paying for,” Armstrong said. “One of the best things you can do, both physically and morally, is just make sure that families have what they need to be successful.”
Every facet of a child’s life is negatively affected by economic deprivation — reading scores, home stability and rates of child abuse, to name a few, said Brooks, the executive director of Kentucky Youth Advocates.
“The child tax credit is certainly about economics, but it’s also about health, it’s about education and it’s about safety for kids,” Brooks said.
The federal spending bill passed the U.S. Senate Tuesday, with Vice President JD Vance casting the tie-breaking vote.
What else is in Trump’s spending bill?
The Senate version of the spending bill, similar to the House proposal, would increase the cost for immigrants to apply for work authorization, asylum, temporary protected status and humanitarian parole.
The bill also calls for increasing the number of Immigration and Customs Enforcement officers, hiring 10,000 new agents by 2029.
Medicaid faces its largest cuts since the 1960s under the bill, with nearly $1 trillion in planned reductions. Planned Parenthood would also be barred from receiving Medicaid funds for a year.
The bill would leave 11.8 million more Americans uninsured by 2034 and 3 million more would become ineligible for food stamps, according to the Congressional Budget Office.
The federal budget deficit would increase by nearly $3.3 trillion in the next 10 years as a result of the bill, according to the CBO.
Kentucky Sen. Mitch McConnell voted to pass the bill, while Sen. Rand Paul was one of three Republican senators to vote no.
The U.S. House could vote on the bill as early as Wednesday.
Editor’s note: This story was updated at 9 a.m. Thursday, July 3, with the latest data from Columbia University.
This story was originally published July 2, 2025 at 5:25 PM.
