Child Tax Credits are tax breaks the federal government offers to support U.S. taxpayers with eligible dependent children under 17. These credits aim to reduce the economic burden of raising children and make it easier for families to afford essential expenses.
What is the Child Tax Credit?
The Child Tax Credit is a federal tax benefit that financially supports taxpayers with dependent children under 17. The base credit is $2,000, but the amount varies depending on the taxpayer’s modified adjusted gross income (MAGI). High-income earners may receive a reduced amount or become ineligible altogether.
Eligibility for the Child Tax Credit depends on factors such as the caregiver’s filing status, relationship to the child, and age. This benefit is supposed to provide significant relief to needy families while incentivizing care for dependent children.
The Child Tax Credit is nonrefundable, reducing taxes dollar-for-dollar, although some taxpayers may qualify for a partial refund depending on their financial situation.
Additional Child Tax Credit
The Additional Child Tax Credit is the refundable portion of the Child Tax Credit, capped at $1,700 for 2025. This credit is available to taxpayers whose tax liability is lower than their Child Tax Credit amount or individuals who do not file a tax return. By providing a refundable portion, this credit ensures that low-income families can still benefit, even if they owe no taxes.
Adoption Tax Credit
The Adoption Tax Credit is a nonrefundable federal tax credit designed to assist families with adopting a child, including legal fees, travel expenses, and other qualified costs.
- For 2025, the maximum Adoption Tax Credit is $17,280 for returns filed in 2026.
- The credit amount phases out completely for taxpayers with an income above $292,150, with adjustments for inflation.
- As a nonrefundable credit, the Adoption Tax Credit cannot exceed the taxpayer’s tax liability. However, any unused credit can be carried forward for up to five years, ensuring families can maximize the benefit over time.
2025 Earned Income Tax Credit (EITC)
The Earned Income Tax Credit (EITC) benefits individuals and families with moderate to low incomes. Eligible income includes wages, self-employment earnings, or income from an owned farm or business.
| Number of Qualifying Children | EITC Amount (2024) | Maximum Income (Single or Head of Household) |
|---|---|---|
| 3 or more | $8,046 | $61,555 |
| 2 | $7,152 | $57,310 |
| 1 | $4,328 | $50,434 |
| 0 | $649 | $19,104 |
The investment income limit for EITC eligibility is $11,950 or less.
Child Tax Credit 2025
For 2025, the Child Tax Credit has the following features:
- Base credit amount: $2,000.
- Refundable portion: Up to $1,700.
- Income thresholds:
- $400,000 for married couples filing jointly.
- $200,000 for all other filers.
These thresholds ensure that middle—and high-income earners can still benefit from the credit while targeting low-income families for the most significant assistance.
Requirements to Qualify for the Child Tax Credit
To qualify for the Child Tax Credit, both the taxpayer and the qualifying child must meet seven key requirements:
- Age: The child must be under the age of 17 at the end of the tax year (2025).
- Relationship: The child must be your:
- Daughter, son, sister, brother, foster child, half-sibling, stepchild, or step-sibling, OR
- A descendant of these relations (e.g., grandchild, niece, or nephew).
- Dependent Status:
- You must claim the child as a dependent on your tax return.
- The child cannot file a joint tax return unless claiming a refund for withheld income tax or estimated tax paid.
- Residency: The child must have lived with you for at least half of the year, with certain exceptions for special circumstances such as education or medical care.
- Financial Support: You must have provided at least half of the child’s financial support during the year. The child is ineligible if they have provided for themselves for over six months.
- Citizenship: The child must be a U.S. citizen, U.S. national, or U.S. resident alien with a valid Social Security number.
- Income: The Child Tax Credit incrementally reduces as the taxpayer’s income exceeds the applicable threshold. These reductions are applied proportionally to ensure fairness while supporting lower-income families.