With 2025 upon us, the official start of tax season is less than a month away, which means many people will now start seriously considering what options they have for deductions and credits. You may have heard a lot about the child tax credit — and his 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 reduce their tax bill based on the number of dependent children they have. In the decades since then, the amount the credit offers has increased and, at least this year, it can now increase your tax refund, too.
Recent studies show that the child tax credit can have a significant impact on the quality of life for many families by helping them lift themselves 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 America's Rescue Plan, with payments reaching approximately 61 million children through their tax-paying parents.
Keep reading 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 refund and see if your state has its own version of the credit.
What is Child Tax Credit?
As the name suggests, the federal child tax credit, first written into the US tax code in 1997, provides a credit for each dependent child you claim on your tax return. Depending on your situation, this can either help reduce the amount you'll owe in taxes or help increase the amount you'll get in your tax refund.
Currently, the credit is good for up to $2,000 per dependent child on your taxes. The entire amount is “non-refundable”, meaning you can only get so much to reduce your tax burden. However, up to $1,700 per child can be claimed as a “refundable” credit, which means it can be used to increase the amount you get in your tax refund.
These amounts remain in effect for the 2025 tax season. Unless Congress passes another extension, in 2026 the value of the child tax credit will be reduced to $1,000, none of which is refundable.
How do I qualify for the Child Tax Credit?
On IRS Child Tax Credit website sets the parameters for what makes an eligible dependent child. The child was at most under the age of 17 by the end of 2024 and must be, according to the IRS, “your son, daughter, stepson, eligible foster child, brother, sister, half-brother, half-sibling, half-brother, half-sister, or descendant of one of them (eg nephew, niece or nephew).”
Additionally, this child must not have provided more than half of their own support during the 2024 tax year and must live with you for at least half of the year. The child must also be a U.S. citizen, citizen, or resident alien and must have a valid social security number issued before the due date of your tax return.
Do I earn too much money to qualify for Child Tax Credit?
While anyone with a dependent child can claim Child Tax Credit, only people below certain income thresholds qualify for the full amount. To do so, your 2024 income must be $200,000 or less if you file as an individual or $400,000 or less if you file jointly. The credit you can get per child starts to decrease in value by $50 for every $1,000 of income you make above those thresholds.
For more, learn how a saver's credit can help reduce your tax bill.