It is called the Child Tax Credit (CTC) and it helps up to 48 million taxpayers in the US who need a little extra help raising their dependent children under the age of 17.
This is a non-refundable credit that can lower your tax bill by the same amount. However, there are some situations where taxpayers may also be able to get a partial credit refund.
The CTC helps low-income families take care of their children under 17 years old by giving them money. About 48 million of these families receive it.
For tax years 2024–2025, which will be filed in early 2025, the refundable part of the Child Tax Credit will be $1,700.
The IRS says on its website that the CTC for fiscal year 2025, which can be claimed on tax returns in 2026, will stay at $1,700. However, there is a plan for this to be talked about during the tax debate for 2025.
Besides this portion that can be refunded after taxes, taxpayers should also see if they are eligible for extra Child Tax Credits that are available in 15 states and can help them make extra money.
Requirements for the Child Tax Credit in 2025
People must meet the following requirements in order to be eligible for the Child Tax Credit on their yearly tax returns:
- Age: Your child must have been under 17 at the end of the tax year.
- Relationship: The child you claim must be your son, daughter, stepchild, foster child, brother, sister, half-brother, half-sister, stepbrother, stepsister or a descendant of any of those people (for example, a grandchild, niece or nephew).
- Dependent status: You must be able to properly claim the child as a dependent. The child cannot file a joint tax return, unless they file it to claim a refund of withheld income taxes or estimated taxes paid.
- Residency: The child you are claiming must have lived with you for at least half of the year (there are some exceptions to this rule).
- Financial support: You must have provided at least half of the child’s support during the past year. In other words, if your qualifying child was financially supported for more than six months, they are probably considered non-qualifying.
- Your child must be a “U.S. citizen, U.S. national or U.S. resident alien,” according to the IRS, and must have a valid Social Security number.
- Income: Parents or caregivers claiming the credit also typically cannot exceed certain income requirements. Depending on how much their income exceeds that threshold, the credit is gradually reduced until it is eliminated.
