Washington, D.C.’s local Child Tax Credit faces uncertainty after Trump signed a law that threatened to block the policy before it could fully take effect. A dispute over the timeframe Congress has to disapprove D.C. legislation has left advocates and policymakers unsure about the tax credit’s fate.
The Child Tax Credit, or CTC, was approved in November 2025 as part of a broader tax measure. It would provide tax refunds of up to $1,000 per child in low and moderate-income D.C. families.
The District was the first city in the country to establish a local version of the credit, though several states have adopted similar policies. Unlike its federal counterpart, the local CTC has no required income threshold, allowing families with little or no income to qualify.
“It’s a racial justice issue in D.C. in particular because the families that are most impacted by poverty in D.C. are Black families. There are also brown families as well,” Melody Webb, executive director of the D.C. Guaranteed Income Coalition, said. The coalition advocates for permanent guaranteed income, the local CTC, and other social programs in Washington, D.C.
Between 2019 and 2023, almost one in three Black children in the District lived in poverty, according to the DC Fiscal Policy Institute, a racial justice-centered fiscal policy organization that supports the CTC. An unpublished analysis from the institute found that the local credit, combined with the Earned Income Tax Credit, could reduce child poverty in the District by 20%.
After tax cuts included in President Trump’s “One Big Beautiful Bill” were projected to reduce D.C.’s revenue by $600 million, the D.C. Council voted to decouple, separating portions of the tax code from the federal bill. This decision prevented 13 of the bill’s 84 tax-related provisions, including taxes on tips and certain corporate tax breaks, from taking effect in D.C.
During the decoupling process, D.C. Councilmember Zachary Parker (D-Ward 5) introduced an amendment to direct some of the resulting revenue toward the new CTC and an expanded Earned Income Tax Credit, a refundable tax credit for residents who make under $60,000.
“We are in a time when poor and working class residents are facing an alarming convergence of pressures,” Parker said at a Nov. 4 legislative meeting. “This amendment is about supporting everyday Washingtonians, and it is a way to support the district’s financial future.”
The council passed the measure on an emergency basis, although some council members and policy analysts criticized the timeline and called for more deliberation.
A matter of D.C. autonomy
Congress’s ability to influence D.C. policymaking complicates the implementation of the CTC. Under the Home Rule Act of 1973, Congress typically has 30 legislative days to pass a disapproval resolution blocking new D.C. measures.
The House and Senate voted to block the tax code decoupling in early February. Both votes passed by slim margins — 215-210 in the House and 49-47 in the Senate. President Trump signed the bill into law on Feb. 18.
Congressional Republicans argued that opting out of federal tax cuts would ultimately harm D.C. residents, with Rep. James Comer commenting on the federal tax cuts ahead of the House vote.
“These reforms provide much needed tax relief for both individuals and businesses,” Comer said. “However, the D.C. Council has cherry-picked pieces of these federal tax reforms and decided to just ignore the application in the local tax code.”
Parker published a statement following the Senate vote, calling it “a direct attack on the very working people to whom the Council sought to provide relief.”
The disapproval resolution also raises the question of Congressional authority: when does the thirty-day review period begin and end?
D.C. Council Chairman Phil Mendelson issued a notice asserting that the review period ended Wednesday night, hours before the Senate vote, and argued that the decoupling legislation and CTC should remain in effect. According to Mendelson, the review period starts when the bill is transmitted to Congress. Some representatives, however, argue that the timeline started on Jan. 7, when the bill appeared in the official Congressional record.
Sen. Rick Scott (R-Florida), who sponsored the disapproval resolution in the Senate, dismissed Mendelson’s argument.
“I guess he can go to court. I’m pretty comfortable we did everything on time,” Scott said.
D.C. Attorney General Brian Schwalb published an opinion Tuesday reaffirming Mendelson’s argument that the disapproval resolution missed the deadline. He also noted that Congress didn’t make the law retroactive, arguing that the 2025 tax season would remain unchanged as a result.
For Samantha Waxman, deputy director of state policy research at the Center on Budget and Policy Priorities, the legal uncertainty lies within how the thirty-day period is calculated. The Center on Budget and Policy Priorities is a progressive D.C.-based think tank that focuses on fiscal policy.
“My understanding is that it’s been a long, unsettled question of exactly when the review period starts, and the particular deadline that the Council cited has a real, material impact on whether or not the federal bill disapproving D.C. law moves forward,” Waxman said.
The dispute has also reignited debate surrounding D.C. Home Rule after a separate budget fiasco last year forced D.C. to cut $350 million in expenditures. While several other states, including Maryland and Virginia, have already divorced their taxes from the federal bill, D.C. remains the only jurisdiction where Congress can directly block this move.
The last time Congress overturned D.C. legislation was in 2023, when the council attempted to revise the criminal code. The current disapproval resolution is only the fifth time that Congress has blocked a policy since Home Rule began in 1973.
“We’ve seen this as sort of a tool of oppression to deny D.C. residents full autonomy, legislative and budget autonomy, and this is just, you know, members of Congress flexing their muscle and using D.C. as sort of an experiment and essentially as a target,” Webb said.
Supporters continue fighting for the CTC
The current proposal is not the first attempt at establishing a local CTC. Councilmember Parker previously introduced a less expansive credit in 2023, which was set to go into effect in 2025. As federal job cuts cast uncertainty on District revenue, however, Mayor Muriel Bowser removed the measure from the city’s 2026 budget.
The first iteration capped benefits at three children and granted up to $420 per child, less than half of what is provided under the current policy.
The CTC drew support from several local stakeholders, including the DC Fiscal Policy Institute and the D.C. Guaranteed Income Coalition.
“The first iteration of it, it was a bit of a fight,” Webb said “We had to build support, and we’ve been doing that over time. We had to get the commitment of council members, the majority of the council, to support funding, which, again, would basically be a really revolutionary thing.”
Supporters of the CTC argue that the economic benefits are undeniable, citing research that links refundable tax credits to better testing scores, higher future earnings, and improved health outcomes. The expansion of the federal CTC in 2021, paired with other pandemic aid programs, led to the lowest recorded level of child poverty nationwide.
“In D.C., we have a lot of children who are living in poverty because of systemic racism and government policies that hold them down,” Tazra Mitchell, the chief policy and strategy officer of DC Fiscal Policy Institute, said. “The Child Tax Credit could mean, for many of them, fewer years in poverty and really change their life trajectories.”
The loss of the local CTC and Earned Income Tax Credit is also far from the only impact the disapproval resolution will have on D.C. Without decoupling from federal law, D.C. will face a $600 million loss in revenue. According to projections, maintaining all existing services in next year’s budget would require a $1.1 billion revenue increase.
“Yanking away these supports is only going to allow child poverty to continue to spike, and that’s really alarming, because it doesn’t just affect the children, and that’s bad enough. But it does affect us all, because it holds back our broader economy,” Mitchell said.
Despite the uncertainty of the CTC, advocates say that they will keep fighting for the credit.
“This is just a bump in the road,” Mitchell said leading up to the Senate vote. “We’re really committed to bringing this back, so I have no doubt that we will do what we’ve done in past years and come together and call for its restoration.”
Councilmember Parker’s office held a “Rally for DC Families” earlier this week to advocate for the CTC and other social programs.
Mitchell said that the response of Washingtonians has been particularly meaningful to her.
“It’s really refreshing to see D.C. residents stand up against increased attacks on our autonomy and come together to protect all of the progress that we’ve built,” Mitchell said. “We really do believe that democracy starts in D.C., and we have to stand up to these power grabs and fiscal sabotage.”
