Child Tax Credit 2025
Updated on March 04, 2025
Reviewed By
Febb Borje, a tax professional with 11 years of expat tax experience, specializes in US tax preparation, tax planning, and tax advice for US citizens and Green Card holders living and working in Australia.
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Table of Contents
How much is the Additional Child Tax Credit worth in 2025?
For those filing their 2024 tax returns during 2025, the Child Tax Credit (CTC) stays the same at US$2,000 per qualifying child, however, the Additional Child Tax Credit which is the “refundable” portion has been increased by $100 to a total of $1,700.
Overall, there are no other recent changes or modifications in the credit amount of the tax benefit.
What is the Additional Child Tax Credit?
The Additional Child Tax Credit (ACTC) is the refundable part of the Child Tax Credit (CTC) and it’s the part that can be claimed by Americans abroad. Essentially, the ACTC is a refundable tax credit of up to US$1,700 per qualifying child under 17 (Tax Year 2024).
If a taxpayer is living outside the US and they owe only a little US tax or zero, the refundable tax credit becomes an actual refund. This means saving real money in your pocket… not just a credit.
Are there additional eligibility criteria for the ACTC?
Yes, so on top of the basic eligibility criteria for the Child Tax Credit, taxpayers need to comply with some additional requirements to get the refund.
Eligibility criteria for CTC:
- Child’s age: The child must be under 17 by the end of the tax year.
- Relationship: The child must be your son, daughter, stepchild, foster child, sibling, or a descendant of any of these.
- Dependent status: The child must be a dependent on your tax return.
- Citizenship: The child needs to be a US citizen, US national, or US resident alien.
- Social Security Number (SSN): The child must have an SSN issued before the tax year ends.
- Living situation: The child must have lived with you for more than half of the tax year.
- Financial support: The child should not have paid more than half of their own expenses.
- Modified adjusted gross income: Your MAGI should not exceed US$200,000 for single filers or US$400,000 for married or filing jointly.
Additional criteria for Additional Child Tax Credit (ACTC):
- Earned income: You must have at least US$2,500 in earned income coming from your wages, salaries, or self-employment income. However, the MAGI limit still applies.
- No tax liability: You are not required to have a tax liability in order to claim a refund through ACTC.
What if my income exceeded the income limit?
If your income exceeds US$200,000 for single filers or US$400,000 for married or jointly filing, you can still receive the Child Tax Credit, but your CTC amount will be gradually reduced.
You will be entering into a phase-out zone wherein, for every excess of US$1,000 over the income limit, your credit is reduced by US$50 per child.
For example: a married couple filing jointly earns US$420,000 with two qualifying children. Since their income is over by US$20,000 on the income limit, the CTC amount is reduced by US$1,000 (US$20,000 ÷ US$1,000 × US$50) per child.
Instead of receiving US$4,000 (US$2,000 per child), they only receive US$3,000. This will continue until the amount gets to zero, meaning you will not receive any CTC or ACTC at all.
Does the child’s age affect the credit amount?
No, the credit amount doesn’t change based on your child’s age, as long as they are under 17 at the end of the year.
Calculate how much Child Tax Credit refund you can claim with our calculator.
How can I claim the Child Tax Credit?
To claim the CTC, you need to complete Form 1040 or your individual tax return and include your child’s details. Ensure you provide the required information for each qualifying child, including their valid Social Security Number.
Then, attach Schedule 8812, “Credits for Qualifying Children and Other Dependents”. Here, you can also calculate the credit amount that you can claim. Lastly, submit your tax return accurately to the IRS.
Can I still qualify for the ACTC if I’m self-employed?
Yes, if you’re self-employed, you can still qualify for the Additional Child Tax Credit as long as you meet the requirements. Your self-employment status doesn’t affect your eligibility for the ACTC.
You just need to ensure your child qualifies based on age, relationship to you, dependency, citizenship, residency, and financial support.
Does the Child Tax Credit affect my ability to claim other deductions?
No, the CTC will not interfere with deductions such as standard or itemized deductions, retirement contributions, or the student loan interest deduction.
However, it does lower your overall tax liability, which might affect the amount of your tax refund.
Can both parents claim the Child Tax Credit if they file separately?
No, only one parent can claim the CTC per child. Typically, the custodial parent (with whom the child lives for more than half the year) claims the credit.
But in some cases, the non-custodial parent may claim the CTC if the custodial parent signs IRS Form 8332.
Are there online tools available to assist with the CTC?
Yes, there are several tools available to assist you with the Child Tax Credit (CTC):
IRS Interactive Tax Assistant: This can help you determine your eligibility for the CTC, Additional Child Tax Credit (ACTC), or Credit for Other Dependents (ODC). You can access it on the IRS website.
Child Tax Credit Calculator: The child tax credit calculator can help you estimate your child tax refund and check your eligibility.
What is the impact of the Child Tax Credit on American families?
The Child Tax Credit is one of the most impactful family tax benefits, helping reduce poverty, increase financial stability, and support working parents. Since it has a direct influence on tax liability, it provides potential benefits.
But it is not just for low-income families; many middle-class families benefit, too. It has already had a positive effect on children’s future success and economic growth.
