The Child Tax Credit (CTC) is a valuable benefit for families in the U.S., offering up to $2,000 per child to help reduce taxes. However, this credit may change after 2025, potentially lowering the amount to $1,000 per child unless Congress takes action. This article explains the CTC’s eligibility rules, how to claim it, and possible future changes that could affect your tax refund.
What Is the Child Tax Credit (CTC)?
The Child Tax Credit allows parents to lower their tax bill by up to $2,000 per eligible child. This credit is designed to provide financial relief to families with dependents. However, if no new laws extend it, the credit will drop to $1,000 per child in 2026.
Who Qualifies for the Child Tax Credit?
To receive the CTC, taxpayers must meet the following eligibility criteria:
- Relationship: The child must be a biological child, stepchild, or another direct relative.
- Residency: The child must live with the taxpayer for at least half of the year.
- Dependency: The child must be claimed as a dependent on the tax return.
Additionally, income limits apply:
- $200,000 for single filers
- $400,000 for joint filers
If your income exceeds these amounts, the credit begins to phase out.
Will the Child Tax Credit Change?
In 2024, the House of Representatives proposed a bill to increase the refundable portion of the CTC to $1,900 and adjust it for inflation. However, the Senate did not pass the bill, leaving the future of the credit uncertain. If the current law expires in 2025, the credit amount and income thresholds could change.
How to Claim the Child Tax Credit
To claim the CTC, taxpayers must file their tax return with the IRS and include:
- Form 1040 (Individual Income Tax Return)
- Form 1040-SR (For seniors aged 65+)
- Schedule 8812 (To claim the Additional Child Tax Credit)
If your CTC exceeds your tax liability, you may be eligible for a partial refund of up to $1,700.
Can You Claim the CTC for Previous Years?
If you forgot to claim the CTC in a past tax year, you can file an amended return using Form 1040-X. Here are the deadlines for retroactive claims:
| Tax Year | Deadline to Claim CTC |
|---|---|
| 2023 | April 15, 2027 |
| 2022 | April 15, 2026 |
| 2021 | April 15, 2025 |
If you already filed a return without claiming the CTC, you can still amend your return to receive the credit.
Key Takeaways
- The CTC provides up to $2,000 per child, but it may be reduced after 2025.
- Eligibility depends on the child’s relationship, residency, dependency status, and the taxpayer’s income.
- The House proposed increasing the CTC refund, but the bill has not yet passed the Senate.
- Taxpayers must file Form 1040, 1040-SR, or Schedule 8812 to claim the credit.
- If you missed claiming the CTC in previous years, you can file an amended return before the deadline.
Tip: Stay updated on legislative changes and file your taxes on time to maximize your CTC benefits.