If you have children who are under age 17, the child tax credit might cut your tax bill by up to $2,000 — and some taxpayers may qualify for up to $1,700 of that to be paid out to them in a tax refund — on tax returns due this year and next. After that, this particular tax credit is set to drop back to just $1,000.
Keep in mind that the child tax credit shouldn’t be confused with the child and dependent care credit or the earned income tax credit. Plus, there’s a credit for other dependents — those that don’t qualify for the child tax credit — worth up to $500 (its name is just that: credit for other dependents).
How to qualify for the child tax credit
To qualify for the child tax credit, you must, of course, meet some rules:
- Each qualifying child must be under age 17 at the end of the tax year. For example, your child must have been 16 or younger at the end of 2024 if you want to claim the child tax credit on your 2024 tax return that’s due April 15, 2025.
- If your modified adjusted gross income exceeds certain thresholds — $400,000 for married couples who file jointly and $200,000 for all other filers — your credit amount is reduced by $50 for each $1,000 of income exceeding the threshold.
- Each qualifying child must be a U.S. citizen, U.S. national or resident alien and have a valid Social Security number.
- The child must be a legally recognized child, stepchild, foster child, sibling, half-brother or half-sister or a descendant of one of these categories (such as a grandchild, niece or nephew).
- The child must not have provided more than half of their own financial support for the year.
- The child must have lived with you for over half of the year.
- You must claim the child as a dependent on your tax return.
How to claim the child tax credit
If you’re a parent who meets the qualifications, you can claim the child tax credit, and the additional child tax credit if applicable, by filling out Schedule 8812.
That form will help you figure out how much of the child tax credit you can claim, including any refundable portion. The IRS has step-by-step instructions on how to fill out Schedule 8812. Or, consult with a tax preparer to determine if you’re eligible for the child tax credit. Alternatively, most reputable tax software services will calculate your eligibility for the child tax credit and the refundable additional child tax credit.
The additional child tax credit: How it works
The refundable portion of the child tax credit, worth up to $1,700 of the $2,000 child tax credit, is often called the additional child tax credit.
If you break even on your taxes — that is, you don’t owe any money — then the child tax credit can’t help you. However, you may qualify to claim the additional child tax credit.
This portion of the child tax credit allows you to receive up to $1,700 per child (for tax years 2024 and 2025) as a refund — even after your tax bill is reduced to zero.
The additional child tax credit is calculated at 15 percent for every dollar of earned income starting at $2,500. Again, filling out Schedule 8812 can help you calculate your refundable child tax credit.
The IRS generally distributes refunds that include the earned income tax credit and additional child tax credit in late February.
The child tax credit after 2025
The current version of the child tax credit, put in place by the Tax Cuts and Jobs Act of 2017, is set to expire at the end of 2025.
Unless lawmakers take action, for tax year 2026 the child tax credit will revert back to being worth up to $1,000 per child, from the current $2,000 amount, and the credit will phase out at modified adjusted gross income of $110,000 for married couples filing jointly and $75,000 for all other filers.
Also, the additional child tax credit will be worth up to $1,000, down from the current $1,700, and will be calculated at 15 percent of earned income starting at $3,000, rather than the current $2,500.
State child tax credits
In addition to the federal child tax credit, 16 states also offer a child tax credit, according to the National Conference of State Legislatures: Arizona, California, Colorado, Idaho, Illinois, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Oklahoma, Oregon, Utah, and Vermont.
And 12 of those 16 states made their child tax credit refundable: California, Colorado, Illinois, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Oregon, and Vermont.
Eligibility and benefits vary, so check with your state tax website for details.
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