The Child Tax Credit (CTC) is still an important support system for millions of families in the U.S. It helps them afford to raise children under 17 who depend on them. About 48 million taxpayers, mostly low-income families, benefit from this program because it lowers their tax bills and in some cases gives them partial refunds.
What to Expect for 2025
For tax returns filed in early 2025 for the 2024 fiscal year, the refundable portion of the CTC remains at $1,700. According to the IRS, this amount will also apply for tax returns filed in 2026 for the 2025 fiscal year, unless changes are made during the 2025 tax debate.
Additionally, taxpayers in 15 states may qualify for supplementary Child Tax Credits, providing an opportunity to earn additional income beyond the federal benefit.
Eligibility Requirements for the Child Tax Credit
To claim the Child Tax Credit, families must meet several criteria:
- Age Requirement:
The child must be under 17 years old at the end of the tax year. - Relationship:
Eligible children include biological, adopted, or foster children, as well as siblings, step-siblings, half-siblings, or descendants of any of these (e.g., grandchildren or nieces and nephews). - Dependent Status:
The child must be claimed as a dependent. They cannot file a joint tax return unless it’s solely to claim a refund of withheld income taxes or estimated taxes paid. - Residency Requirement:
The child must have lived with the taxpayer for at least half of the year. Exceptions to this rule may apply. - Financial Support:
The taxpayer must have provided at least half of the child’s financial support during the year. If another party covered more than half, the child may not qualify. - Citizenship Status:
The child must be a U.S. citizen, U.S. national, or U.S. resident alien and must have a valid Social Security number. - Income Limitations:
The credit is gradually reduced for families with income exceeding certain thresholds. Once income surpasses a specific level, the credit phases out completely.
Partial Refundability and State-Level Benefits
The refundable part of the CTC makes sure that even families who do not owe much in taxes can still get help. Taxpayers are encouraged to look into the 15-state Child Tax Credits that may be able to help them with their finances even more.
Looking Ahead
The Child Tax Credit is still one of the most important ways that millions of families in the United States get extra money. The refundable part is set at $1,700 for now, but that could change as the 2025 tax debate goes on.
Families getting ready for tax season should learn about the CTC’s benefits and who is eligible so they can get the most money from it. Visit the IRS website or talk to a tax expert for more information.
