Traders are banking on an expanded Child Tax Credit passing in 2025.
The odds of Congress expanding the Child Tax Credit for 2025 are spiking, according to prediction markets.
The expanded Child Tax Credit could become reality before the end of the year–or at least its odds of happening are trending up. Prediction market traders are now pricing in a 80% probability that Congress will expand the Child Tax Credit before the end of 2025, according to data from leading platforms where users can bet real money on political and economic outcomes.
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The bullish sentiment follows the House passage of the “One Big Beautiful Bill Act” reconciliation package on May 22nd, which provides a viable legislative pathway for tax changes with just 51 Senate votes. With Republicans controlling both chambers of Congress and the White House, traders see strong odds for action on family tax relief that has historically enjoyed bipartisan support.
Prediction markets have evolved into sophisticated financial instruments that harness the collective wisdom of traders to forecast real-world events. Unlike traditional polls or expert opinions, these markets require participants to put their money where their mouth is, creating powerful incentives for accurate predictions.
Kalshi, one of the leading regulated prediction markets in the United States, allows users to trade on the outcomes of real-world events, with each contract resolving to $1 if the event occurs and $0 if it does not. A contract titled “Will Congress expand the Child Tax Credit in 2025?” lets users bet on whether they believe such legislation will become law before December 31, 2025.
For example, if a trader believes there's a strong chance the credit will be expanded, they might buy a “Yes” contract at the current price of $0.80. If the legislation passes, they receive $1 per contract, earning $0.20 profit per contract. If no expansion occurs, they lose their $0.80 investment. The outcome will be verified using official records from the Library of Congress, ensuring objective resolution.
The current trading price of 80¢ reflects the market's collective assessment of a 80% probability that such legislation will pass. It’s a figure that has surged following the House passage of reconciliation legislation that provides a clear pathway for tax changes.
The Child Tax Credit currently provides up to $2,000 per qualifying child under 17, with $1,700 of that amount refundable for families who owe little or no federal income tax. However, policy experts and advocacy groups have long pushed for expansions that would increase the credit amount, make more of it refundable, or extend eligibility to additional age groups.
The debate gained significant momentum during the COVID-19 pandemic when the American Rescue Plan Act of 2021 temporarily expanded the credit to $3,000 per child (ages 6-17) and $3,600 per child under age 6, while making the entire credit fully refundable. That expansion expired at the end of 2021.
The 80% probability might have seemed disconnected from fiscal constraints.
The “One Big Beautiful Bill Act” passing the House on May 22nd is a major catalyst that prediction market traders were likely anticipating. This suggests informed traders had advance knowledge or correctly predicted this legislative momentum.
The current odds (price) for the expanded child tax credit to pass before the end of the year could go up or down, depending on a number of factors.
There is a good chance it will hold its price or increase even more because:
Watch out for:
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