Raising children can be especially rewarding in many ways. And at tax time, these rewards may include some extra money in your pocket. The child tax credit is a way to reduce your income taxes if you have dependents under age 17.
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Keep in mind that the child tax credit is nonrefundable. If it exceeds your tax bill, you pay zero dollars, but you don't receive the unused portion of the credit. However, you may then be eligible for an additional child tax credit, which could provide a refund after all.
How much is the child tax credit for 2025?
In 2025, the
What are the income limits and qualifications for the child tax credit?
You can claim the full child tax credit for each qualifying child if your annual income is no more than $200,000, or $400,000 if you file jointly with your spouse. If your income is higher, you might still qualify for a partial credit.
For you to be eligible, each child you claim the credit for must:
- Be your child, stepchild, foster child, sibling, step-sibling, half-sibling or a descendant of someone who fits one of those descriptions.
- Be under the age of 17 at the end of the tax year.
- Live with you for more than half the year.
- Be properly claimed as your dependent on your tax return.
- Not provide more than half of their own financial support during the year.
- Not file a joint tax return with anyone except to receive a refund of withheld income or overpaid estimated taxes.
- Be a U.S. citizen, U.S. national or U.S. resident alien.
- Have a Social Security number valid for U.S. employment.
To claim the child tax credit, name your dependents on your Form 1040, U.S. Individual Income Tax Return, and complete a Schedule 8812, Credits for Qualifying Children and Other Dependents. You can find the forms you need and further information on the
If you're divorced, only one of your child's parents or guardians can claim the child tax credit. Typically, it's the custodial parent who the child lived with for the greater number of nights during the year. However, if the custodial parent files Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent, the noncustodial parent can claim the child tax credit instead.
What is the additional child tax credit?
If you're eligible for the child tax credit but your tax bill is low enough to keep you from using the maximum $2,200 per child, you may be eligible for an additional child tax credit.
Essentially, the additional child tax credit (ACTC) is a refundable portion of your child tax credit. It allows you to receive some or all of the child tax credit amount you couldn't use because it exceeded your overall tax bill. For 2025, the refundable ACTC portion is set at $1,700 per child, meaning families who do not owe enough in taxes to use the full child tax credit may still receive up to $1,700 as a tax refund for each qualifying child.
To see how this works using the current approved figures, let's say you have three children and owe $10,000 in taxes during 2025. The child tax credit would reduce your tax liability to $3,400, which is $10,000 minus $2,200 per child. However, if your tax bill was $1,000, the child tax credit would only lower it to zero.
That's where the additional child tax credit comes in. Out of the $6,600 child tax credit you were eligible for, you used $1,000 to reduce your tax bill to zero. The remaining $5,600 went unused. Claiming the additional child tax credit allows you to receive a portion of that unused amount as a refund—$1,700 per child, totaling $5,100 for all three.
How can you plan for peak tax efficiency?
Sure, raising kids can sometimes be "taxing," but it can also entitle you to tax breaks, courtesy of the child tax credit and additional child tax credit. Depending on your income and other aspects of your finances, you might qualify for other tax credits, too.
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