Child Tax Credit 2025: Complete Eligibility and Claiming Guide

What Is the Child Tax Credit?

The Child Tax Credit (CTC) is a tax benefit designed to help families with the cost of raising children. For the 2025 tax year, the credit is worth up to $2,000 per qualifying child under age 17.

Unlike a deduction (which reduces taxable income), a credit directly reduces the tax you owe, dollar for dollar. If your tax bill is $5,000 and you have two qualifying children, the CTC reduces your bill to $1,000.

Eligibility Requirements

Qualifying Child Criteria

Your child must meet all of these tests:

Age: Under 17 at the end of the tax year

Relationship: Your son, daughter, stepchild, foster child, sibling, step-sibling, or descendant of any of these

Support: The child did not provide more than half of their own support

Dependent: You claim the child as a dependent on your return

Residency: The child lived with you for more than half the year

Citizenship: The child must be a U.S. citizen, U.S. national, or U.S. resident alien

SSN: The child must have a valid Social Security number issued before the due date of your return

Income Limits

The full $2,000 credit is available to:

Single filers with modified AGI up to $200,000

Married filing jointly with modified AGI up to $400,000

Above these thresholds, the credit phases out by $50 for every $1,000 of additional income. The credit fully phases out at $240,000 (single) and $440,000 (married filing jointly).

Additional Child Tax Credit (ACTC)

If the Child Tax Credit exceeds your tax liability, you may be eligible for the refundable Additional Child Tax Credit. For 2025, up to $1,700 per child is refundable through the ACTC.

To qualify for the ACTC, you need earned income of at least $2,500. The refundable amount is calculated as 15% of earned income above $2,500, up to the $1,700 maximum per child.

Example: A family with $30,000 of earned income and two qualifying children:

Maximum CTC: $4,000 (2 x $2,000)

Tax liability (estimated): $1,200

CTC used against tax: $1,200

Remaining CTC: $2,800

ACTC calculation: 15% x ($30,000 - $2,500) = $4,125

ACTC received: $3,400 (limited to $1,700 x 2 children)

This family would receive $1,200 in tax reduction plus $3,400 as a refund.

How to Claim

File Form 1040 and list your qualifying children as dependents

Complete Schedule 8812 (Credits for Qualifying Children and Other Dependents)

The credit is calculated automatically by tax software like Taxation.ai

Credit for Other Dependents

If your dependent does not qualify for the CTC (too old, no SSN, etc.), you may claim the $500 Credit for Other Dependents. This applies to:

Children aged 17 and older

Dependent parents or relatives

Dependents with ITINs instead of SSNs

Common Questions

Can divorced parents both claim the CTC?

No. Only the custodial parent (the one the child lived with for more than half the year) can claim the credit. However, the custodial parent can release the claim to the non-custodial parent using Form 8332.

What if my child was born in December?

If your child was born at any point during the tax year, they qualify for the full credit for that year.

Does the credit affect my refund?

Yes. The refundable portion (ACTC) can increase your refund even if you owe no tax. The non-refundable portion reduces your tax bill to zero but not below.

Maximizing the Benefit

Ensure your child has an SSN before the filing deadline

File jointly if married to access the higher income threshold

Coordinate with your ex-spouse on who claims the child for maximum household benefit

Do not forget the Credit for Other Dependents if you support aging parents

File electronically with direct deposit for the fastest refund