Up to 48 million eligible Americans with children can get help from the Child Tax Credit (CTC) and the Refundable Child Tax Credit (RCTC). These two tax breaks can almost double the amount of money you can save if you use them both.
They are both meant to help families with kids with their money, but they work in different ways to help taxpayers, especially those with lower incomes.
The difference between the CTC and the RCTC
Parents and guardians of children younger than 17 can get a tax break called the Child Tax Credit. What the credit is meant to do is lower the taxpayer’s tax bill.
For the fiscal year 2024–2025, the child tax credit is worth $2,000 for each qualifying dependent child living with a qualifying family. The CTC is not refundable, which means it can only lower the amount of taxes owed.
This is an important difference between the CTC and the RCTC. Because you do not get a refund for the amount that your tax bill is less than the credit, you lose the rest of the credit.
The Refundable Child Tax Credit, which used to be called the Additional Child Tax Credit, is a part of the Child Tax Credit that can be returned if the taxpayer does not owe much or any tax.
In contrast to the CTC, this payment can be returned, and for the fiscal year 2024–2025, $1,700 of the $2,000 from the CTC can be returned.
To show this, let us say a family owes $1,500 in taxes. The non-refundable part of the credit, up to $1,500, will lower their tax liability to $0. But there would still be $500 left over from the $2,000 CTC.
Since the CTC is non-refundable, they will lose this $500. If the family is eligible for the Refundable Child Tax Credit (RCTC) portion (up to $1,700) and owes no taxes, they could get the money back (since they do not owe any taxes).
With the Refundable Child Tax Credit, they can get their money back for the part of the credit that is more than their tax bill.
Qualification criteria for the CTC
If you want to get the CTC for the fiscal year 2025–2026, you must meet the following requirements:
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Age: Your child must have been under the age of 17 at the end of the 2025/2026 tax year.
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Relationship: The child you’re claiming must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister or a descendant of any of those people (e.g., a grandchild, niece or nephew).
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Dependent status: You must be able to properly claim the child as a dependent.
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Residency: The child you’re claiming must have lived with you for at least half the year
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Financial support: If your qualified child financially supported themselves for more than six months, they’re not qualified for the CTC.
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Citizenship: Your child must be a “U.S. citizen, U.S. national or U.S. resident alien,” and must hold a valid Social Security number.
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Income: Parents or caregivers claiming the CTC cannot exceed an annual income of $200,000 or $400,000 for married couples filing jointly.
How to claim your CTC
You and your child can get the CTC if you meet the above requirements. You can claim it on your 2025 tax return for the 2024 year. Families get a lot from the CTC, and it is a big part of how the government helps low- and middle-income households.
People who are eligible should get their CTC and TCTC by the middle of February 2019. It is also important to remember that in addition to the federal CTC and RCTC, your state may offer its own child tax credits.
When you want accurate information about tax credits, make sure you always get it from the official government channels.
