As Senate Republicans race to pass President Donald Trump‘s “big beautiful” spending bill, key provisions, including the child tax credit, could change amid Senate-House negotiations.

The Tax Cuts and Jobs Act, or TCJA, of 2017, temporarily boosted the maximum child tax credit to $2,000 from $1,000, which will expire after 2025 without action from Congress.  

If enacted, the Senate bill would permanently increase the biggest credit to $2,200 starting in 2025, according to a draft of the text released on Monday. The measure would also index this figure for inflation after 2025.

By comparison, the House-approved bill would boost the top child tax credit to $2,500 from 2025 through 2028. After that, the credit’s highest value would drop to $2,000 and be indexed for inflation.

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It’s unclear how the final provision may change before Trump signs the package into law. However, in either version, the changes wouldn’t benefit the lowest-earning families, some policy experts say.

“It’s extremely disappointing,” said Kris Cox, director of federal tax policy with the Center on Budget and Policy Priorities’ federal fiscal policy division. “The [child tax credit] increase will go to families with middle and upper incomes.”

Here’s how the tax break works and who could benefit if Congress enacts the updates.

Under current law, 17 million children don’t receive the full child tax credit, according to Cox from the Center on Budget and Policy Priorities. The reason is many families earn too little and they don’t owe taxes.  

The Senate and House proposals don’t change that “central problem,” she said. 

In 2024, the House passed a bipartisan bill to address this issue by boosting the refundable portion of the credit, but the legislation later failed in the Senate.

The proposed higher child tax credit comes as the U.S. fertility rate hovers near historic lows, which has troubled lawmakers, including the Trump administration.

Some research suggests financial incentives, like a bigger child tax credit, could boost U.S. fertility. But other experts say it won’t solve the issue long-term.

Republicans proposed offering a tax break to tipped workers, as part of a package of tax cuts the Senate Finance Committee unveiled Monday. GOP lawmakers are trying to pass their multitrillion-dollar megabill in coming weeks.

The Senate measure — which aims to fulfill a “no tax on tips” campaign pledge by President Donald Trump — is broadly similar to a provision that House GOP lawmakers passed in May as part of a domestic policy bill.

In both versions, the tax break is structured as a deduction available on qualified tips. The Senate legislation defines such tips as ones that are paid in cash, charged or received as part of a tip-sharing arrangement.

Taxpayers — both employees and independent contractors — would be able to claim it from 2025 through 2028. Filers could take advantage whether they itemize deductions on their tax returns or claim the standard deduction.

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Senate Republicans, like those in the House, would limit the tax break to tipped workers in occupations that “customarily and regularly” had received tips on or before December 31, 2024.

The bill text directs the U.S. Treasury Secretary to publish a list of those occupations within 90 days of the legislation’s enactment.

A “no tax on tips” proposal seems to have bipartisan appeal in the Senate, which unanimously passed a similar standalone measure last month. Former Vice President Kamala Harris also supported a tax break on tips during her 2024 presidential campaign.

However, the tax break wouldn’t benefit many workers, tax experts said.

There were roughly 4 million workers in tipped occupations in 2023, about 2.5% percent of all employment, according to an analysis last year by Ernie Tedeschi, director of economics at the Budget Lab at Yale and former chief economist at the White House Council of Economic Advisers during the Biden administration.

Additionally, a “meaningful share” of tipped workers already pay zero federal income tax, Tedeschi wrote. In other words, a proposal to exempt tips from federal tax wouldn’t help these individuals, who already don’t owe federal taxes.

“More than a third — 37 percent — of tipped workers had incomes low enough that they faced no federal income tax in 2022, even before accounting for tax credits,” Tedeschi wrote. “For non-tipped occupations, the equivalent share was only 16 percent.”

Tax deductions reduce the amount of income subject to tax (or, taxable income) and are generally more valuable for high-income taxpayers relative to tax credits.

The Economic Policy Institute, a left-leaning think tank, said it believed a better way to help workers would be to raise the federal minimum wage.

A “no tax on tips” provision “gives the illusion of helping lower-income workers — while the rest of the legislation hands huge giveaways to the rich at the expense of the working class,” EPI economic analysts wrote Thursday.

Not unlike a 529 college savings plan, Trump accounts come with a tax incentive. Earnings grow tax-deferred, and qualified withdrawals are taxed as long-term capital gains.

Under both the House and Senate versions of the bill, withdrawals could begin at age 18, at which point account holders can tap up to half of the funds for education expenses or credentials, the down payment on a first home or as capital to start a small business.

At 25, account holders can use the full balance for expenses that fall under those same guidelines and at 30, they can use the money for any reason. Distributions taken for qualified purposes are taxed at the long-term capital-gains rate, while distributions for any other purpose are taxed as ordinary income.

For children born between January 1, 2024, and December 31, 2028, the federal government will deposit $1,000 into the Trump account, funded by the Department of the Treasury, as part of a “newborn pilot program,” according to the Senate Finance Committee’s proposed text released on Monday.

To be eligible to receive the initial seed money, a child must be a U.S. citizen at birth and both parents must have Social Security numbers.

If a parent or guardian does not open an account, the Secretary of Treasury will establish an account on the child’s behalf. Parents may also opt out.

The White House and Republican lawmakers have said these accounts will introduce more Americans to wealth-building opportunities and the benefits of compound growth. But some experts say the Trump accounts are also overly complicated, making it harder to reach lower-income families.

Universal savings accounts, with fewer strings attached, would be a simpler alternative proposal at a lower price tag, according to Adam Michel, director of tax policy studies at the Cato Institute, a public policy think tank.

“I’m disappointed the Senate did not take the opportunity to improve these accounts,” Michel said. Still, “provisions that remain in both the House and Senate text, we should expect them to become law, and this provision fits that criteria.” 

Mark Higgins, senior vice president at Index Fund Advisors and author of “Investing in U.S. Financial History: Understanding the Past to Forecast the Future,” said the key is “if the benefits comfortably exceed the cost.”

According to the Committee for a Responsible Federal Budget, Trump accounts would add $17 billion to the deficit over the next decade.

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