TOBBBA Family and Child Tax Credits
Aug 21, 2025
Kassidy Wagner
Kassidy Wagner
Families in Montana are navigating a shifting landscape of tax relief. On the federal side, the One Big Beautiful Bill (OBBB) just became law and introduces meaningful updates to children's Child Tax Credit and savings accounts. Meanwhile, Montana lawmakers are considering major new tax credit packages to lighten the financial load of raising kids and strengthening the workforce. Here’s what Montanans need to know.
Federal Updates: The “One Big Beautiful Bill” (OBBB)
This is now law (signed July 4, 2025). It permanently changed the Child Tax Credit (CTC) and introduced Trump Accounts.
Key Changes
Child Tax Credit Increase
Old law: $2,000 per child (up to $1,600 refundable).
New law: $2,200 per child, indexed to inflation. Refundable portion stays the same.
Phases out at $200,000 (single) / $400,000 (married).
Eligibility Tighter
Both parents (if married filing jointly) must have Social Security numbers (SSNs).
This rules out many mixed-status families that previously qualified if at least the child had an SSN.
Trump Accounts (brand new)
Federal government deposits $1,000 for every child born 2025–2028.
Families can contribute up to $5,000/year.
Investments grow tax-free and roll into a traditional IRA when the child turns 18 (or into an ABLE account for children with disabilities).
Purpose: encourage savings and long-term security for kids.
Why it matters: Middle-income families receive more money per child, but lowest-income households may not benefit due to limited refundability and the SSN restriction.
Montana Proposals: SB 321 and Others
Montana lawmakers are debating bills to add state-level family tax credits. These are not yet law, but here’s what’s on the table:
SB 321 (Senate Bill 321)
$1,200 refundable credit per child under age 5 (phases out at $40k single / $80k joint).
$1,600 refundable credit for child care workers (must work 20+ hrs/week, 6+ months/year).
Employer credit up to $5,000 for providing dependent-care benefits.
Status: Passed the Senate, failed in the House (so not enacted yet).
HB 220 (House Bill 220)
$1,200 refundable credit per child under 6 for families making ≤ $50k (single) / $75k (married).
Broader eligibility than SB 321 but with income caps.
HB 537 (House Bill 537)
One-time refundable credit of $3,000 (or a full refund of your Montana income tax liability) in the year a child is born.
Available to families with incomes up to $75k (single) / $150k (married).
Why it matters: Montana is experimenting with ways to directly support families, especially those with very young kids, while also trying to stabilize the struggling child care sector.
What This Means for Montana Families
Stacked Benefits: Families could qualify for the federal Child Tax Credit and state credits, multiplying support.
Refundable Relief: Many state proposals are refundable, meaning you could still get a check even if you don’t owe taxes.
Winners & Losers:
Federal OBBB favors middle- and higher-income families more than the poorest.
Montana’s proposals target lower- to middle-income families and child care providers.
Planning Tip: If you’re expecting a child or paying for child care, watch closely — if Montana passes any of these bills, it could put thousands of dollars back in your pocket.
Bottom line:
At the federal level, the Child Tax Credit is now more generous and permanent, with added savings options.
At the state level, Montana is debating bold credits that could directly boost families and child care workers — but they aren’t law yet.
Swanson Agency
Montana Roots. Future Focused.
Families in Montana are navigating a shifting landscape of tax relief. On the federal side, the One Big Beautiful Bill (OBBB) just became law and introduces meaningful updates to children's Child Tax Credit and savings accounts. Meanwhile, Montana lawmakers are considering major new tax credit packages to lighten the financial load of raising kids and strengthening the workforce. Here’s what Montanans need to know.
Federal Updates: The “One Big Beautiful Bill” (OBBB)
This is now law (signed July 4, 2025). It permanently changed the Child Tax Credit (CTC) and introduced Trump Accounts.
Key Changes
Child Tax Credit Increase
Old law: $2,000 per child (up to $1,600 refundable).
New law: $2,200 per child, indexed to inflation. Refundable portion stays the same.
Phases out at $200,000 (single) / $400,000 (married).
Eligibility Tighter
Both parents (if married filing jointly) must have Social Security numbers (SSNs).
This rules out many mixed-status families that previously qualified if at least the child had an SSN.
Trump Accounts (brand new)
Federal government deposits $1,000 for every child born 2025–2028.
Families can contribute up to $5,000/year.
Investments grow tax-free and roll into a traditional IRA when the child turns 18 (or into an ABLE account for children with disabilities).
Purpose: encourage savings and long-term security for kids.
Why it matters: Middle-income families receive more money per child, but lowest-income households may not benefit due to limited refundability and the SSN restriction.
Montana Proposals: SB 321 and Others
Montana lawmakers are debating bills to add state-level family tax credits. These are not yet law, but here’s what’s on the table:
SB 321 (Senate Bill 321)
$1,200 refundable credit per child under age 5 (phases out at $40k single / $80k joint).
$1,600 refundable credit for child care workers (must work 20+ hrs/week, 6+ months/year).
Employer credit up to $5,000 for providing dependent-care benefits.
Status: Passed the Senate, failed in the House (so not enacted yet).
HB 220 (House Bill 220)
$1,200 refundable credit per child under 6 for families making ≤ $50k (single) / $75k (married).
Broader eligibility than SB 321 but with income caps.
HB 537 (House Bill 537)
One-time refundable credit of $3,000 (or a full refund of your Montana income tax liability) in the year a child is born.
Available to families with incomes up to $75k (single) / $150k (married).
Why it matters: Montana is experimenting with ways to directly support families, especially those with very young kids, while also trying to stabilize the struggling child care sector.
What This Means for Montana Families
Stacked Benefits: Families could qualify for the federal Child Tax Credit and state credits, multiplying support.
Refundable Relief: Many state proposals are refundable, meaning you could still get a check even if you don’t owe taxes.
Winners & Losers:
Federal OBBB favors middle- and higher-income families more than the poorest.
Montana’s proposals target lower- to middle-income families and child care providers.
Planning Tip: If you’re expecting a child or paying for child care, watch closely — if Montana passes any of these bills, it could put thousands of dollars back in your pocket.
Bottom line:
At the federal level, the Child Tax Credit is now more generous and permanent, with added savings options.
At the state level, Montana is debating bold credits that could directly boost families and child care workers — but they aren’t law yet.
Swanson Agency
Montana Roots. Future Focused.