With the arrival of 2025, the official start of tax season is less than a month away, meaning a lot of folks will now begin to seriously consider what options they have for deductions and credits. You might have heard a great deal about the child tax credit — and its uncertain future — but how do you know if you and your family qualify for it?
The US first introduced the federal child tax credit in the late 1990s as a way to help people lower their tax dues based on the number of dependent children they have. Over the decades since then, the amount offered by the credit has increased and, for at least this year, it can also now increase your tax refund.
Recent studies indicate the child tax credit can have a meaningful impact on the quality of life for many families by helping lift them out of poverty. Columbia University’s Center on Poverty and Social Policy found that the payments reduced the monthly rates of child poverty by nearly 30% in 2021 after they were expanded by the American Rescue Plan, with payments reaching roughly 61 million children via their taxpaying parents.
Continue reading on for everything you need to know about qualifying for the federal child tax credit. For more tax help, find out if the child tax credit will delay your return and see if your state has its own version of the credit.
What is the child tax credit?
As the name suggests, the federal child tax credit, first written into US tax law in 1997, provides a credit for each dependent child you claim on your tax return. Depending on your situation, this can either help lower the amount you will owe in taxes or help increase the amount you’ll receive in your tax refund.
Currently, the credit is good for up to $2,000 per dependent child on your taxes. That full amount is “nonrefundable,” meaning that you can only receive that much to lower your tax burden. However, up to $1,700 per child can be claimed as a “refundable” credit, meaning that it can be used to increase the amount you receive for your tax refund.
These amounts remain in effect for the 2025 tax season. Unless another expansion is passed by Congress, in 2026 the value of the child tax credit will decrease to $1,000, none of which can be refundable.
How do I qualify for the child tax credit?
The IRS’ child tax credit webpage lays out the parameters for what makes a dependent child eligible. The child most have been younger than 17 by the end of 2024 and must be, according to the IRS, “your son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of one of these (for example, a grandchild, niece or nephew).”
Additionally, this child must not have provided more than half of their own support over the course of the 2024 tax year and must have lived with you for at least half of the year. The child must also be an American citizen, national or resident alien and must have a valid Social Security number issued prior to the due date of your tax return.
Do I make too much money to qualify for the child tax credit?
While anyone with a dependent child can claim the child tax credit, only people under certain income thresholds qualify for the full amount. To do so, your income for 2024 must be $200,000 or less if you’re filing as an individual or $400,000 or less if you’re filing a joint return. The credit you can receive per child begins to decrease in value by $50 per $1,000 of income you make over those thresholds.
For more, find out how the saver’s credit might be able to help lower your tax bill.
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