IRS Tax 2025 : As the time to pay taxes comes, a lot of American families are looking towards a Child Tax Credit (CTC). The Child Tax Credit can give as much as $2,000 per qualifying child and is expected to give relief to a lot of households. Hedging on being eligible for it, and knowing how to claim it, certainly opens a way toward maximizing this benefit.
This Is The Child Tax Credit
Federal tax incentive for the people who take responsibility of raising a child or children is the Child Tax Credit. Under this measure for the tax year 2024, an amount of $2000 could be availed for each qualifying child aged under 17 years. Amazingly, up to $1,700 of the amount in child tax credit becomes refundable through Additional Child Tax Credit (ACTC). Less tax owed does not prevent an individual from receiving a difference of the above-mentioned credit as a refund.
Eligibility Requirements To Claim Child Tax Credit
There are some criteria that must be fulfilled to claim the entire Child Tax Credit. These include:
- Age: The child has to be below 17 years old at the end of the calendar year of the tax year.
- Relationship: The child must be your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant from these (e.g., grandchild, niece, or nephew).
- Dependent Status: The child must be considered by you on your federal return as dependent.
- Residency: The child must have lived with you more than half of the year.
- Support Test: The child cannot have provided over half of his or her support during the tax year.
- Citizenship: The child must be a U.S. citizen, U.S. national, or U.S. resident alien and have a valid social security number.
Income Thresholds And Phase-Outs
The Child Tax Credit has requirements for income limitations:
- Complete Credit Eligibility: So, single filers who have MAGI up to $200,000 and married couples filing jointly with MAGI up to $400,000, are eligible for the full credit.
- Phaseout Range: Reduction by $50 for each $1,000 above the limits for incomes beyond the thresholds. For instance, if both the husband and wife had a MAGI of $410,000, they would see a $500 deduction from the total amount of their credits.
Claiming The Child Tax Credit
For you to claim the Child Tax Credit:
- Tax Filing: Complete and file your federal tax return using Form 1040.
- Schedule 8812: Attach Schedule 8812 (“Credits for Qualifying Children and Other Dependents”) for the computation and claiming of the credit.
- Documentation: Keep a complete record of your child’s Social Security number, a number indicating residency, and other eligibility criteria.
Additional Child Tax Credit (ACTC)
The refundable Additional Child Tax Credit may be available to you if your Child Tax Credit exceeds your tax liability:
- Refundable Amount: The amount refundable is up to $1,700 for each qualifying child. citeturn0search9
- Income Earned Requirement: At least $2,500 of earned income must be shown for ACTC eligibility.
Looking Ahead
Currently, unless Congress intervenes, the Child Tax Credit will automatically revert back to its status quo prior to 2018 levels in 2026. Under this condition, the credit amount would drop to $1,000 per child and income phase-out would have lower thresholds.