Learn how the Child Tax Credit works, who qualifies, and how to claim it, plus explore other key tax credits parents can take advantage of this tax season.
The IRS has many options for parents in need of financial help when it comes to their household taxes. There are tax credits for parents, deductions, and exemptions, many of which are items you'll handle when filling out your tax return or when working with your preparer during tax season.
One of the most common credits is the Child Tax Credit (CTC). But what is the Child Tax Credit, and how might it apply to you?
Essentially, it’s a tax break that some families with qualifying dependent children can use to offset the costs of caring for their kids. If you have young children living in your household as dependents, you might be eligible for this specific tax credit.
Let’s get into the details so you can take advantage of this financial break.
What is the Child Tax Credit (CTC)?
The Child Tax Credit (CTC) is a type of tax credit for taxpayers with dependent children. The CTC for taxpayers with dependent children is one of the most common tax credits for parents. Families with children can claim this credit for each qualifying dependent child when they file their tax returns.
The requirements and amounts for the Child Tax Credit are subject to change each year. Make sure you’re familiar with the eligibility factors you must meet to claim this credit before you file your tax return.
How Much is the Child Tax Credit?
The Child Tax Credit amount is up to $2,000 per qualifying child. How much of the Child Tax Credit you qualify to receive depends on several factors, like income, your relationship with the child, and more.
If you meet all the eligibility requirements, you may be able to claim the full amount for this credit. Even if you only meet some of the eligibility requirements, you might be able to claim a partial credit.
The Child Tax Credit Income Limit Requirement
The Child Tax Credit income limit is one of the primary qualifications you’ll need to meet to receive this credit. It involves the amount of annual income you earn. To be eligible, your annual income can be no more than $200,000, or $400,000 if you’re filing jointly.
That means that if you make more than $200,000 (or $400,000 if you’re filing jointly), you might not qualify to claim this credit. But if you make less than $200,000 or $400,000 filing jointly, then you meet one of the first main requirements to apply this credit to your taxes.
Other Child Tax Credit Requirements
So, what else is required to use the CTC? Both adults and children involved in using this tax credit must meet the following requirements to be eligible.
Child Tax Credit Requirements for Adults
For an adult to qualify to use this credit, they must meet the following requirements:
- Annual income is no more than $200,000 or $400,000 if you’re filing jointly.
- Be related to the child (for example, the child is your child, stepchild, eligible foster child, sibling, step-sibling, half-sibling, grandchild, or your niece or nephew)
- Provide more than half of the child’s financial support
Child Tax Credit Requirements for Qualifying Children
For a child to qualify to use this credit, they must meet the following requirements:
- Each qualifying child has a Social Security number
- Be under 17 years old by the end of that tax year
- Be related to the filing adult (for example, the child is your child, stepchild, eligible foster child, sibling, step-sibling, half-sibling, grandchild, or your niece or nephew)
- Not provide for more than half of their own financial support
- Have lived with you for more than half of that tax year
- Be claimed as your dependent on your tax return (“dependent” is a tax term that refers to people in the household who depend or rely on the income of the head of the household)
- Does not file taxes jointly with a spouse
- Be a US citizen, US national, or US resident alien
How to Claim the Child Tax Credit
To claim the Child Tax Credit, you will want to fill out the Schedule 8812: Credits for Qualifying Children and Other Dependents tax form and attach this completed form to your 1040 tax return form.
- Fill out the Schedule 8812: Credits for Qualifying Children and Other Dependents tax form.
- Attach the Schedule 8812 tax form to your 1040 tax return form.
Is the Child Tax Credit Refundable?
The Child Tax Credit is not fully refundable. For the 2024 tax year, it primarily reduces the amount of taxes you owe and won’t increase your refund unless you qualify for the Additional Child Tax Credit (ACTC). If eligible, up to $1,700 per child may be refundable.
Keep in mind that legislation is under consideration that could change refundability rules in the future.
Additional Child Tax Credit (ACTC)
The Additional Child Tax Credit (ACTC) allows families to receive a portion of the Child Tax Credit as a refund if the credit exceeds their tax liability. For the 2025 tax year, up to $1,700 per qualifying child is refundable if you meet certain criteria, such as earning at least $2,500 (excluding foreign-earned income) or claiming three or more qualifying dependents.
Other Child Tax Credits You Might Qualify For
There are other tax breaks available for parents and guardians with children. For example, you could also qualify for the Child and Dependent Care Credit, Adoption Credit, Credit for Other Dependents (ODC), or Additional Child Tax Credit (ACTC).
Child and Dependent Care Credit
The Child and Dependent Care Credit, also sometimes called the Child Care Tax Credit, is a tax credit that provides financial assistance to parents and caregivers with child and dependent care expenses.
You may qualify if:
- You have a child younger than 13
- You have childcare expenses for children under 13
- This childcare allowed you to work while your child was cared for
- You have care expenses for a dependent who is unable to care for themselves
Adoption Credit
The Adoption Credit, also known as the Adoption Tax Credit, helps adoptive parents offset the expenses associated with adopting a child. Adoption can be an expensive process, and when you have qualifying adoption expenses, you can include them on your tax return for a tax credit. This adoption tax credit can reach up to $14,440 per child.
You may qualify if:
- You paid for qualifying adoption expenses like:
- Adoption fees
- Court costs
- Attorney fees
- Travel expenses
- Other related costs
Credit for Other Dependents (ODC)
The Credit for Other Dependents (ODC) is a tax credit that helps tax filers who have qualifying dependents who don’t meet the criteria of the Child Tax Credit.
You may qualify if:
- You support dependents of any age
- The dependents have Social Security numbers or individual taxpayer identification numbers (ITIN)
- The dependents are US citizens or resident aliens
Earned Income Tax Credit
The Earned Income Tax Credit was designed to help working parents with low to moderate income. Your eligibility for this credit will depend on how much you make, whether you're filing jointly with a spouse, and how many dependents or children you have.
You may qualify if:
- You are a working parent
- You have low to moderate household income
Education Tax Credit
The Education Tax Credit, also known as the American Opportunity Tax Credit, helps students and parents cover the costs of higher education. It reduces the amount of taxes a tuition-paying student owes each year, helping increase a student's tax return.
Parents can also take advantage of an education tax credit when they have helped their children pay for undergraduate education expenses.
You may qualify if:
- One of your children is an undergraduate student
- You helped your child pay for education expenses in the tax year
Tax Break for Buying a House
Homeowners have access to special tax breaks, many of which include deductions for certain aspects of home ownership. Homeowners can claim deductions for mortgage interest payments, mortgage points, private mortgage insurance, and other related expenses. They can also find some additional tax deductions on the state level.
You may qualify if:
- You own a home
- You have qualifying home expenses like mortgage interest payments
In Conclusion
Parents do a lot of work to take care of their children, so make sure you don't miss out on tax credits you qualify for. Speak with a tax professional to be sure you're getting all of the tax advantages you deserve.
