During tax season 2025, it’s important to remember that there’s a tax credit available to parents and guardians and they need to complete the process correctly to receive it. Not only is the Child Tax Credit (CTC) meant to cover tax liability, but a portion of it is refundable if the filer’s taxes are fully paid. The eligibility criteria are explained below, and you can also find information about possible changes happening due to the expiration of the Tax Cuts and Jobs Act.
Parents can still claim the CTC in tax season 2025
Parents and guardians will be happy to know that they still have time to claim the Child Tax Credit of up to $2,200 per dependent under the age of 17. A portion of the CTC, called the Additional Child Tax Credit (ACTC), is available as a cash refund for filers whose taxes are paid up to date, and this amount is $1,700. The ACTC will be paid into taxpayers’ bank accounts if they have any credit due.
The funds are meant to assist parents with the essential costs associated with raising children, such as housing, food, clothing, and schooling or childminding.
The TCJA and how it affects the CTC in the future
During President Donald Trump’s first term in office, he enacted a law called the Tax Cuts and Jobs Act (TCJA) in 2017, which is due to expire at the end of 2025. Before the TCJA was in place, parents were only eligible for a credit of up to $1,000 per child. The increase to $2,000 was imposed under the TCJA, but this may drop if the Act is not extended.
There are income thresholds for taxpayers to be eligible to claim the CTC, which are currently set at $200,000 a year for individuals and $400,000 for couples who file their taxes jointly. People who earn more than this will see the CTC amount drop incrementally according to how much more than the limits they earn. If the TCJA falls away, the limits will drop to $35,000 and $110,000, meaning more people will receive less under the Child Tax Credit.
It’s important to keep in mind that these changes will only apply from 2026, meaning that the tax credit is stable for this year’s filing season and next year’s.
Congress needs to decide what to do with the TCJA
It’s up to Congress to decide the future of the TCJA, and they may choose to extend it. This would be good news for parents as the thresholds to qualify for the full amount are higher and the CTC and ACTC amounts themselves are higher. Congress could also decide to enact different guidelines in the coming years, and it’s difficult to predict what these may be.
Who qualifies to claim the Child Tax credit?
These are the eligibility criteria for children under the CTC, according to the United States Internal Revenue Service:
- Child’s age: The maximum age for each child is 17 years and this applies to their age at the end of the tax year for which you are claiming the credit.
- Relationship: The child must have one of the following relationships to the taxpayer: child, stepchild, foster child, sibling, or a descendent of any of these (for example, grandchild, niece, nephew).
- Residency: The child must have lived with the tax filer for more than half the year.
- Citizenship: The minor must be a US citizen, US national, or US resident alien.
- Financial support: The child must not have provided more than half of their own financial support during the tax year (such as if they are employed part-time and cover their own expenses).
To maximize credits and refunds, taxpayers are reminded to ensure that their returns are submitted before the deadline and without errors to avoid problems or internal reviews. In addition to the CTC, taxpayers can claim another credit called the EITC (Earned Income Tax Credit).
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