What to know about claiming the Child Tax Credit in 2025

The Child Tax Credit (CTC) can help families with the costs of raising children. If you’re working on your 2024 taxes, you’ll need to follow the child tax credit 2024 guidelines. Here’s what you need to know. 

What is the Child Tax Credit?

The CTC offers a nonrefundable* tax break for each child in a qualifying household, even if you don’t file a tax return. If you qualify, it reduces the amount of taxes owed and can even result in a refund if the credit exceeds what you owe. 

Currently, the CTC allows up to $2,000 per qualifying child under the age of 17 for the 2024 tax year. The refundable portion of that (ACTC) maxes at $1,700 per child (up from $1,600 in previous years). The CTC will revert to pre-2018 levels after 2025 if Congress does not extend the Tax Cuts and Jobs Act of 2017, which is scheduled to expire on December 31, 2025. This will reduce the credit to $1,000 per qualifying child in 2026.

Be sure to speak with a tax professional for the most accurate and up-to-date information. 

* Though the CTC is nonrefundable overall, some households qualify for a refundable portion, known as the Additional Child Tax Credit (ACTC), which allows them to receive a portion of the credit as a refund if they meet the income requirements. 

Be a financially smart family!

Be a financially smart family!

From saving for the future to understanding credit, see how families are thriving with Greenlight.

Try Greenlight today

Who qualifies? 

The Child Tax Credit is available to families with dependent children under the age of 17 at the end of 2024, as long as they meet certain income requirements. 

Income-wise, you may qualify if you’re married and filing jointly with an adjusted gross income under $400,000 or under $200,000 for individual filers. The credit phases out for $50 for every $1,000 above these limits.

How do I claim the child tax credit?

To claim the Child Tax Credit:

1. Determine your eligibility based on income limits and qualifying children

2. File your 2024 tax return 

3. Provide the required information about your children and household on your tax return

It might seem like a chore, but understanding how to claim the CTC can really pay off. Let's explore why it's worth your time.

FAQs about the Child Tax Credit in 2025

Q: Who is eligible for the Child Tax Credit?

A: Households with dependent children under the age of 17 at the end of the tax year who fit the annual earnings and other eligibility criteria.

Q: How much is the Child Tax Credit worth?

A: The maximum amount for each qualifying child is $2,000 for eligible children.

Q: Will there be any additional benefits for parents in 2025?

A: The refundable portion of the credit, known as the Additional Child Tax Credit (ACTC) has increased to $1,700 per child for tax year 2024. The total credit remains $2,000 per child.

Q: How do I know if I qualify for the Child Tax Credit? 

A: You must have at least one qualifying child under the age of 17 and meet income and other eligibility requirements. Check the IRS Child Tax Credit requirements here. 

Q: Is the Child Tax Credit based on my adjusted gross income (AGI)? 

A: Yes, your eligibility for the child tax credit is based in part on your AGI.

Q: Can I claim the Child Tax Credit if I’m not the child’s parent? 

A: In some cases, you may be eligible if you meet the caregiver requirements. Check the IRS child tax credit requirements here. 

Q: How is the Child Tax Credit distributed? 

A: The CTC can be distributed as a reduction in your tax liability or as a refund if the credit exceeds your tax liability.

Q: Can I claim the Child Tax Credit if I am self-employed? 

A: Yes, self-employed individuals can claim the credit as long as they meet other eligibility criteria.

Q: What happens if my income increases in 2025? 

A: If your income increases in 2025, it may affect your eligibility or the amount of Child Tax Credit you can claim on your 2025 taxes.

Q: What happens if I have a new child in 2025? 

A: If you have a new child in 2025, you can claim the CTC for tax year 2025 (which you would file in 2026) for that child as long as you meet the other eligibility criteria. If you had a new child in 2024, you can claim the CTC for tax year 2024 while you file your taxes by April 15, 2025. 

Q: Can I claim the Child Tax Credit for a child who is not a U.S. citizen? 

A: To claim the Child Tax Credit, the child must be a U.S. citizen, U.S. national, or U.S. resident alien with a valid Social Security Number. Confirm the IRS child tax credit requirements here. 

Want more tips for living your best financial life? Visit the Greenlight's Learning Center for helpful resources on all things family, finance, and fun.