If you qualify for the child tax credit, you could save money on your tax bill, or even boost your refund. The credit is worth up to $2,000 per child in 2024, for tax returns filed in 2025, and the same amount in 2025, for tax returns filed in 2026.
The child tax credit reduces your tax bill dollar for dollar, but it’s not refundable. However, there’s also the Additional Child Tax Credit (ACTC), which is refundable. The ACTC is worth up to $1,700 per child in 2024 and 2025.
The child tax credit in 2024 and 2025
You and your kids must meet certain requirements to claim the tax credit, including:
- Each qualifying child must be under age 17.
- If your modified adjusted gross income exceeds certain thresholds ($400,000 for married couples 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 United States 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.
What to know about the additional child tax credit
If you break even on your taxes, you may still be able to claim the additional child tax credit. This portion of the child tax credit allows you to receive up to $1,700 per child as a refund — even after your tax bill is reduced to zero.
For example: Tim and Martha are a couple with a kid, and they qualify for a child tax credit of $2,000. However, their tax bill is only $1,000. They can use the child tax credit to reduce their tax bill to zero, but that’s it. That’s where the additional child tax credit comes in. With it, Tim and Martha might be able to get some of that credit back as a refund.
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 entering your eligible children on your Form 1040. You’ll also need to complete Schedule 8812 to figure your child tax credit amount and include it in your tax return. The IRS has step-by-step instructions on how to fill out Schedule 8812.
The IRS generally distributes refunds that include the earned income tax credit and additional child tax credit in late February.
What taxpayers should do next
- Check if you qualify for the child tax credit: Review IRS guidelines or consult your tax advisor to determine if you’re eligible for the child tax credit. Also, most reputable tax software services will calculate your eligibility for the child tax credit.
- See if your state offers a state child tax credit: In 2023, 14 states — California, Colorado, Idaho, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Oklahoma, Oregon, Utah and Vermont — offered a version of the child tax credit, according to the Institution on Taxation and Economic Policy. And 11 of those 14 states — California, Colorado, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Oregon and Vermont — made their child tax credit refundable. Eligibility and benefits vary, so check with your state government website for details.
- File early, and work with a professional: Experts stress the importance of starting early to make sure you have ample time to track down all your documents and get your questions answered. The sooner you submit your 2024 taxes in 2025, the sooner you’ll be able to receive any refund you might be eligible for.
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