Currently, approximately 48 million families benefit from the Child Tax Credit (CTC) to help support their children. This credit primarily targets low-income families who meet the eligibility criteria, which include having qualifying dependents under the age of 17.
Changes to the Child Tax Credit for 2025
The Internal Revenue Service (IRS) has announced that for the 2025 tax year (to be filed in 2026), the standard Child Tax Credit will be $1,700 per qualifying child.
However, discussions are ongoing among policymakers to potentially revise this amount as part of the 2025 tax code debates. There is growing interest in reforming the credit to better support families with young children.
Call for the Reinstatement of the 2021 Expanded Child Tax Credit
Advocacy groups, such as the Center on Budget and Policy Priorities, are urging lawmakers to bring back the enhanced American Rescue Plan Child Tax Credit that was in effect during 2021. Under this plan, families received $3,600 for children aged 5 and under and $3,000 for children between 6 and 17 years old.
This expanded credit had a profound impact, potentially reducing child poverty rates by ensuring that an estimated 2.6 million children would no longer live below the poverty line.
The Child Tax Credit in the 2024 Presidential Campaign
The expansion of the Child Tax Credit became a focal point during the 2024 presidential campaigns. Vice President Kamala Harris advocated for reinstating the 2021 version of the credit, emphasizing that many young families struggle to provide for their children due to limited resources.
Harris stated:
“I’ve met countless young families who are eager to give their children the best, but often lack the financial means. I am committed to expanding the Child Tax Credit to offer them relief.”
Despite her efforts, this initiative did not move forward after the election loss.
Similarly, former President Donald Trump and his running mate Senator JD Vance expressed interest in revisiting the topic, suggesting it could return to the legislative agenda.
Eligibility Criteria for the Additional Child Tax Credit (ACTC)
To claim the Additional Child Tax Credit (ACTC), several eligibility requirements must be met. These include age, relationship to the filer, and income thresholds.
The ACTC can be claimed when filing your federal tax return. First, complete the Child Tax Credit Worksheet found in the instructions for Form 1040. If eligible, you’ll need to submit Schedule 8812 to claim the additional refund.
Key Points for ACTC Eligibility:
- The ACTC can reduce your tax liability to zero and allows a refundable portion of up to $1,600 of the $2,000 standard Child Tax Credit per child for 2024 and 2025.
- A qualifying child must have a valid Social Security number issued before the due date of your tax return (including extensions).
- The ACTC phases out for families with an adjusted gross income above $200,000 (or $400,000 for married couples filing jointly).
- You cannot claim the ACTC if you or your spouse (if filing jointly) submit Form 2555 or Form 2555-EZ related to foreign earned income.
| Criteria | Requirement | Maximum Credit | Phase-Out Begins | Special Conditions |
|---|---|---|---|---|
| Child’s Age | Under 17 years old | $1,700 | $200,000/$400,000 | Must have a Social Security Number |
| Income Threshold | Adjusted gross income under $200,000 (single) | $2,000 | $400,000 (joint) | Reduced credit if above threshold |
| Additional Refundable Credit | Up to $1,600 if eligible | N/A | N/A | Requires Schedule 8812 |
| Exclusions | Foreign income (Forms 2555/2555-EZ) not allowed | N/A | N/A |
What is the new Child Tax Credit amount for 2025?
The IRS has set the Child Tax Credit at $1,700 per qualifying child for the 2025 tax year.
Will the expanded Child Tax Credit from 2021 return?
There is a push among policymakers to reinstate the 2021 enhanced credit, which provided $3,600 for younger children and $3,000 for older dependents. However, no final decision has been made yet.
Who qualifies for the Additional Child Tax Credit?
Eligibility depends on factors like the child’s age, relationship to the filer, and income limits. You must also complete Schedule 8812 to claim the ACTC.
