In 2025, a new bill called the “One Big Beautiful Bill Act” is set to provide significant financial relief to millions of American families. This legislation aims to increase the Child Tax Credit and introduce a new savings program for children, offering a total of $2,500 in benefits.
What Is the $2,500 Free Cash?
The $2,500 comes from two main provisions in the new bill:
- Child Tax Credit Increase: The Child Tax Credit is being raised from $2,000 to $2,500 per child. This means families with children will receive more money to help with expenses.
- “Trump Account” Savings Program: A new program is being introduced where every baby born between January 1, 2025, and January 1, 2029, will receive a $1,000 federal bonus. These funds will be placed into a special savings account, known as a “Trump Account,” which can grow with additional tax-free contributions up to $5,000 per year until the child turns 18. Partial access to these funds begins at 18 years old, with full access at 30.
Who Is Eligible?
The benefits are available to:
- Families with children:
- Parents of babies born between January 1, 2025, and January 1, 2029:
These provisions are designed to assist families in managing the costs associated with raising children and to promote long-term financial planning.
When Will the Payments Be Made?
The Child Tax Credit increase is set to begin with the 2025 tax year, meaning families will see the higher credit when they file their 2025 taxes in 2026. The “Trump Account” savings program will start for babies born after January 1, 2025, with the $1,000 federal bonus being deposited into the account shortly after birth.
Important Notes
- These benefits are set to expire with the end of President Trump’s potential second term in January 2029.
- The legislation has passed the House of Representatives and is awaiting Senate approval.
- Some experts have expressed concerns that the bill may disproportionately benefit wealthier households, as they are more likely to be able to contribute additional funds to the “Trump Account” savings program.
FAQs
1. What is the “One Big Beautiful Bill Act”?
It’s a new law proposed in 2025 to provide financial relief to American families by increasing the Child Tax Credit and introducing a new savings program for children.
2. How much money will families receive under this bill?
Families can receive up to $2,500 in total: $2,000 from the increased Child Tax Credit and $500 from the new savings program.
3. Who is eligible for this relief?
Families with children under the age of 18 and parents of babies born between January 1, 2025, and January 1, 2029, are eligible.
4. When will the payments be made?
The increased Child Tax Credit will be available when families file their 2025 taxes in 2026. The new savings program will start for babies born after January 1, 2025.
5. How can I claim this relief?
Eligible families need to file their 2025 tax returns by the deadline in 2026. Parents of newborns will automatically receive the savings program benefits.
