The Child Tax Credit (CTC) is one of the most effective tools in the country for providing assistance and breathing room to tens of millions of families who are raising children.
It has also been shown to be one of the most effective tools available for reducing child poverty. The credit, which was implemented in 1997, now provides up to $2,000 per child annually to approximately 40 million families.
The Child Tax Credit allows eligible families to save money on their taxes. If you don’t typically file a tax return, you may still be eligible for the benefit.
The Child Tax Credit is available to all eligible children who have a Social Security number that allows them to work in the United States.
These are the major changes to the Child Tax Credit in 2025
As Tax Season 2025 approaches, many American families are looking into potential credits and deductions to maximize their refunds. Without a doubt, the strength of the economy in the coming months is determined by the time of year.
The primary benefit of the Child Tax Credit (CTC) is that it provides significant financial relief to eligible families. In light of rising parental expenses, this credit has been an important tool for assisting households.
Finally, having children always adds a significant amount to American households’ costs; therefore, the government and IRS are working to reduce that expense in some way.
We will see some new features in Tax Season 2025 that will give Americans an advantage. The Child Tax Credit is a tax break that reduces tax liabilities for families with children under the age of 17.
We will reportedly have slightly less money in 2025 than in previous years as credit returns to normal levels following the temporary extensions in 2021:
- The maximum is $2,000 for each eligible child.
- If the credit exceeds the amount of taxes due, the refundable component can be up to $1,500.
Families with moderate and high incomes are the main beneficiaries of this credit, while low-income households may also be eligible under specific circumstances.
Nevertheless, this could vary a little based on each citizen’s circumstances. The best course of action is to present all of our knowledge and supporting documentation to an expert if we are unsure.
What qualifications are needed to qualify for the 2025 Child Tax Credit?
The Child Tax Credit for each American household varies according to the family’s circumstances. However, we can be confident that there is a minimum requirement to qualify for this tax credit. To receive the Child Tax Credit in 2025, you must meet the following requirements:
For qualifying children
- Be younger than 17 after the 2024 tax year.
- Possess an up-to-date Social Security number (SSN).
- Be an American national, citizen, or resident.
- Spent over half of the year living with the taxpayer.
Regarding taxpayer income
- If an individual’s adjusted gross income (AGI) surpasses $200,000 or $400,000 for couples filing jointly, the credit starts to be deducted.
Tax return
- Include qualifying dependents on Form 1040 or 1040-SR when filing your taxes for the 2024 tax year.
How can Americans claim the Additional Child Tax Credit (ACTC)?
If you are eligible for the CTC but are unable to use it fully because you owe less than your credit amount or do not owe taxes, claiming the additional child tax credit may allow you to receive a partial refund.
Keep in mind that the IRS multiplies your earned income above $2,500 by 15% to determine how much you will receive in additional child tax credits.
You may claim the amount that is less, which is either that amount or the portion of the CTC credit to which you were entitled but were unable to fully utilize.
Remember, the maximum refund for each eligible dependent in the 2024 tax year is $1,700. Math may become more difficult if you have three or more dependent children. For more information, see Schedule 8812.
