About 48 million low-income families get help from the Child Tax Credit (CTC) to pay for things like their kids’ schooling, housing, and food. The CTC is currently available to adults with qualifying children under 17 years old.
It can be claimed as a tax payment that is not refundable. But Americans should know that the Internal Revenue Service (IRS) just announced a few weeks ago that the child tax credit for the tax year 2025, which will apply to taxes filed in April 2026, will have a maximum refundable portion of $1,700 and a cap of $2,000, which could mean that your tax bill goes down by the same amount.
The Child Tax Credit is one of the best ways in the country to help tens of millions of families raise their kids and give them some breathing room. In addition, it has been shown to be one of the best tools ever made for reducing child poverty.
The credit has been around since 1997 and now gives up to $2,000 a year to each child in about 40 million families. The Child Tax Credit is a way for families with qualifying children to get tax breaks.
Do not forget, though, that you might still be able to get CTC even if you do not file a tax return. Form 1040, U.S. Tax Return, must have Schedule 8812, Credits for Qualifying Children and Other Dependents, fully filled out and attached.
The IRS confirmed a new child tax credit for eligible Americans
If a married couple filing jointly makes more than $400,000 a year, they will still be able to get the Child Tax Credit in 2025. The income limit will stay at $200,000 for everyone else. People who want to get this payment should fill out the normal Child Tax Credit Worksheet on their federal income tax return.
This worksheet is included in the instructions for Form 1040 or 1040-SR. To be eligible, the applicant must meet a number of conditions, such as having a certain amount of income and having a child of a certain age. According to the IRS, these are the main things they will need to think about:
- The Social Security Administration must provide a Social Security number to an eligible child on the due date of the tax return (including extensions).
- The eligible child must be less than 17 years old.
- Meet the relationship and residency standards to get a consistent definition of a qualified child.
- Contribute no more than half of their support during the tax year.
- Lived in your household for at least half of the taxable year, except if the child was born or died during the year, was temporarily absent, kidnapped, or disappeared, or was a child of divorced or separated parents.
- Be claimed as a dependent upon your return.
- Do not submit a joint return for the year (or simply for a refund of withheld or anticipated tax).
- Be a US citizen, national, or resident alien.
- You must have a Social Security Number issued by the Social Security Administration by the tax return’s due date (including extensions).
Why is the child tax credit (CTC) from the IRS important for millions of American families?
As part of the American Rescue Plan, the Child Tax Credit (CTC) grew at a rate that had never been seen before. Everything from the CTC was given to all needy families at once, so for the first time, the families with the most needs did not get the least.
As of this month, the CTC was given out in equal amounts on the same day every month. Most of the time, the payments were made by direct deposit. For the first time, the CTC made more money available to help young children.
The results were important. Many working families were able to take a break thanks to the longer CTC, which was given to more than 60 million children.
In addition, it cut child poverty by a large amount. Child poverty hit all-time lows for black, Hispanic, Asian, and Native American kids. The expansion cut child poverty by almost half, to a new all-time low of 5.2%. Also, the American Rescue Plan led to record-low rates of child poverty in Puerto Rico in 2021 and made sure that all Puerto Rican families with children could get the CTC in the same way that other American families could.
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