Raising a child in the United States is expensive, but the federal government offers a "Child Tax Credit" (CTC) to help ease the financial burden.

This credit reduces the amount of income tax you owe and can often increase your tax refund.

Recent legislative changes have updated the rules for the 2025 tax year (for taxes you will file in early 2026). Here is a breakdown of what you need to know.
 

How much can you receive?

For the 2025 tax year, the maximum credit has increased to $2,200 per qualifying child (up from $2,000 in previous years).
 

• Tax Reduction: This amount is deducted "dollar-for-dollar" from your tax bill.
• Refundable Portion: Even if you don’t owe any taxes, you may still receive a portion of the credit as a refund. This is called the "Additional Child Tax Credit," and it is worth up to $1,700 per child.

 

Who qualifies for the credit?

To claim a child for this credit, they must meet several IRS requirements:
 

• Age: The child must be under 17 years old at the end of the year.
• Relationship: The child can be your son, daughter, stepchild, foster child, sibling, step-sibling, or a descendant of any of these (like a grandchild, niece, or nephew).
• Living Situation: The child must live with you for more than half of the year.
• Financial Support: The child must not provide more than half of their own financial support.
• Citizenship: The child must be a U.S. citizen and have a valid Social Security Number (SSN).

 

Requirements for Parents

To be eligible, you (or your spouse if filing jointly) must have a valid Social Security Number that allows you to work in the United States.

Additionally, families must earn at least $2,500 per year to qualify for the benefit.
 

Income Limits

The full credit is available to most middle- and lower-income families. However, it begins to decrease if your income exceeds certain levels:
 

1. $400,000 for married couples filing jointly.
2. $200,000 for single parents or heads of household.

If your income is higher than these limits, the credit is reduced by $50 for every $1,000 of additional income.
 

How to Claim the Credit

When you file your taxes in early 2026, you will need to:
 

1. List your dependents on Form 1040.
2. Complete Schedule 8812 to calculate your specific credit amount.
3. Wait for your refund: The IRS typically begins sending out refunds related to this credit in mid-February.

 

Are there other credits available?

Yes. Depending on your situation, you may also qualify for:
 

• Adoption Credit: Up to $17,280 to help with legal and adoption fees.
• Child and Dependent Care Credit: To help cover the cost of daycare or a babysitter.
• Credit for Other Dependents: A $500 credit for dependents who don’t qualify for the main child credit (such as older children or elderly parents).
• Earned Income Tax Credit (EITC): A benefit for low-to-moderate-income working families that could be worth up to $8,046 for those with three or more children.

 

A Note on the "Old" $3,600 Credit

During the pandemic in 2021, the government briefly increased the credit to $3,600 and sent out monthly checks. That program was temporary and has ended.

The current benefit is now set at the $2,200 limit mentioned above.

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