About 48 million low-income families benefit from the Child Tax Credit (CTC), which helps them pay for their children’s education, housing, and food. The CTC is a non-refundable tax payment for adults with qualified dependents under 17.
The Internal Revenue Service (IRS) announced a few weeks ago the amount of the child tax credit for fiscal year 2025, which will apply to taxes filed in April 2026, with a maximum limit of $2,000 and a maximum refundable portion of $1,700. This non-refundable tax credit can lower your tax bill dollar for dollar.
The 2025 Child Tax Credit qualifying threshold will be $200,000 for all other filers and $400,000 for married taxpayers filing jointly.
Requirements for the CTC in 2025:
You may claim it on your federal tax return by filling out the standard Child Tax Credit Worksheet, which is located in the Form 1040 or 1040-SR instructions. The child’s age, relationship to the applicant, and financial circumstances are among the requirements that must be fulfilled to qualify.
- Before the due date of your tax return (including extensions), an eligible kid must have a Social Security Number issued by the Security Administration.
- After the tax year, the eligible kid must be less than 17.
- Fulfill the residence and related requirements for a standardized definition of a qualified kid.
- They do not support themselves more than half of the time during the tax year.
- Have resided with you for more than half of the tax year, except for children of divorced or separated parents, transitory absences, births or deaths that occurred during the year, and kidnappings or disappearances.
- Be included in your return as a dependent.
- Avoid filing a combined return for the whole year, or merely file a joint return to get your estimated or withheld taxes back.
- Be a citizen, national, or resident alien of the United States.
- Before the due date of your tax return (including extensions), you must have a Social Security Number that the Social Security Administration has issued.
What is Child Tax Credit?
The federal government launched the Child Tax Credit (CTC) 2024 program to help qualified families pay for the expenses of raising children. The credit is meant to improve children’s well-being and lessen the financial strain on parents or guardians. This program was significantly enhanced in 2021 as part of the American Rescue Plan Act.
The kid Tax Credit was worth $2,000 for each eligible kid under 17 before these modifications. However, under the American Rescue Plan Act, the credit was raised to $3,000 for children aged 6 to 17 and $3,600 for children under 6. Furthermore, the credit became fully refundable, making it available to households with minimal or no federal tax obligations.
Eligibility Criteria for Child Tax Credit:
- After the tax year, the kid claimed as dependent must be younger than 17.
- One may be a daughter, son, stepdaughter, stepson, foster kid, adoptive child, grandchild, or sibling descendant.
- The youngster could not have supported himself more than half the time.
- You must include a kid as a dependent on your federal income tax return. They must be American citizens, US nationals, or US resident aliens.
- They must have spent half of the tax year living with you.
