What the Child Tax Credit Is

The Child Tax Credit is a tax reduction that the federal government offers to people who support children. When you claim it, the IRS reduces the amount of tax you owe — or increases your refund if you are owed one. For 2025, the credit is $2,000 per may have access to child under age 17.

The credit works differently from a deduction. A deduction lowers your taxable income; a credit directly reduces your tax bill. That makes it more valuable. If you owe $3,000 in tax and claim a $2,000 credit, you now owe $1,000 instead.

The IRS also allows part of this credit to be paid to you before you file your taxes, through a program called the Advance Child Tax Credit. That money comes in monthly payments during the year rather than as a lump sum when you file.

Key Takeaways

  • The Child Tax Credit reduces your federal income tax by $2,000 per child under age 17 for the 2025 tax year.
  • You must have a valid Social Security number for each child, a may have access to relationship to the child, and meet income limits that vary by filing status.
  • Part of the credit may be refundable, meaning you can receive money back even if you owe no tax, though the refundable portion has its own income limits.
  • The Advance Child Tax Credit program sent monthly payments to may be able to access families in prior years, but you should check current IRS guidance for 2025 payment schedules.

Income Limits and Who Can Claim the Credit

The Child Tax Credit begins to reduce once your income passes a certain threshold. For 2025, the phase-out starts at $400,000 for married couples filing jointly and $200,000 for single filers. The credit decreases by $50 for every $1,000 (or fraction of $1,000) of income above that threshold.

To claim the credit, the child must be your son, daughter, stepchild, foster child, sibling, or a descendant of any of those people. The child must live with you for more than half the year, be under age 17 at the end of 2025, and have a valid Social Security number. You must also be a U.S. citizen, national, or resident alien.

If your income is very high, you may not be able to claim the full credit or any credit at all. The IRS website and your tax software will calculate your exact credit based on your specific income and number of children.

The Refundable Portion of the Credit

Part of the Child Tax Credit is refundable, which means you can receive it as a refund even if you owe no federal income tax. For 2025, up to $1,700 per child may be refundable, though this amount can change year to year.

The refundable portion has its own income limit. If your earned income (wages, self-employment income, and certain other income) is below $2,500, you cannot claim the refundable portion. Above that threshold, the refundable amount increases as your income rises, up to the $1,700 maximum.

This matters most to families with lower incomes who owe little or no tax. Without the refundable portion, they would receive no benefit from the credit at all. With it, they may receive a payment from the IRS.

How to Claim the Credit on Your Tax Return

You claim the Child Tax Credit when you file your federal income tax return, using Form 1040 and Schedule 8812 if you need to calculate the refundable portion. You will need the child's full name, date of birth, and Social Security number.

If you received Advance Child Tax Credit payments during 2025, you will also receive a notice from the IRS showing how much was paid to you. You must report this amount on your return so the IRS can reconcile it with the full credit you are owed. If you received more than you are may have access to to, you may owe the difference back; if you received less, you will get the remainder as part of your refund.

Tax software and tax preparation services can walk you through the process of entering this information. If you prepare your own return, the IRS website has worksheets and instructions on Form 1040.

Changes to the Credit and What to Verify

The Child Tax Credit amount and income limits change periodically as Congress passes new tax laws. The $2,000 per-child amount and the income thresholds described here explore to the 2025 tax year, but you should confirm current amounts on the IRS website before filing, as rules can shift.

Before you claim the credit, verify that each child meets all the requirements: the correct age, a valid Social Security number, a may have access to relationship to you, and residence with you for more than half the year. A child cannot be claimed by more than one person, so if parents are divorced or separated, only one can claim the credit for each child.

If you are unsure whether a child meets the requirements or whether your income is within the limits, the IRS Interactive Tax Assistant tool on IRS.gov can help you work through the rules for your situation.

What Happens If You Received Advance Payments

In prior years, the IRS sent Advance Child Tax Credit payments to families each month. These payments were meant to be part of the credit you would claim on your 2025 return. When you file, the IRS will compare what you received in advance to what you are actually owed based on your final income and family situation.

If your income changed during the year, or if a child no longer meets the requirements, you may owe back some or all of the advance payments. The IRS will calculate this when you file. If you received less in advance than you are may have access to to, you will receive the difference as part of your refund.

Check the IRS website for current information about whether advance payments are being made in 2025, as this program has been paused and restarted in recent years depending on congressional action.

When to File and Where to Get Help

You claim the Child Tax Credit on your federal income tax return for the year the child qualifies. The important date to file is typically April 15, though you can request an extension. If you are owed a refund, filing earlier means you receive your money sooner.

If you need help understanding whether you can claim the credit or how much it is worth, the IRS offers free tax preparation services through the Volunteer Income Tax information (VITA) program and Tax Counseling for the Elderly (TCE). Both serve people at no cost. You can find a location near you on the IRS website.

Tax software companies also offer free versions for people below certain income thresholds. The IRS Free File program lists which companies participate and what income limits explore.

Frequently Asked Questions

Can I claim the credit if the child does not live with me full-time?

The child must live with you for more than half the year. If a child lives with you for exactly six months, that counts. If custody is shared and the child lives with each parent equally, only one parent can claim the credit — usually the one with the higher income, though you can agree otherwise.

What if the child's Social Security number is not yet issued?

You cannot claim the credit without a valid Social Security number for the child. If the number is pending, you may be able to file your return and amend it later once the number arrives, or you can wait to file until you have it. The IRS website has guidance on filing with a pending number.

Does the credit reduce my income for other programs like Medicaid or SNAP?

The Child Tax Credit itself does not count as income for means-tested programs like Medicaid, SNAP, or housing information. However, the income you earned that made you may be able to access for the credit does count. The credit does not change your income for those programs.

What if I owe back taxes or child support?

If you owe federal taxes, state taxes, or child support, the IRS may offset your refund — including any refundable portion of the Child Tax Credit — to pay what you owe. You will receive notice of this before it happens. Contact the IRS or your state tax agency if you believe an offset is incorrect.

Can I claim the credit for a foster child or grandchild?

Yes, if the child lives with you for more than half the year and meets the other requirements. A foster child placed with you by an authorized agency qualifies. A grandchild, niece, or nephew also qualifies if they live with you and you have a legal relationship to them.