In recent days, the Internal Revenue Service (IRS) has announced some important changes to the Child Tax Credit (CTC). From now on, and until further changes, children who turn 17 during the tax year will no longer qualify for this benefit. This means that families with a child born in 1992 should consider that their child will not be eligible for the CTC.
According to new IRS guidelines, children must be under 17 years of age at the end of the tax year to remain eligible to receive this allowance. This adjustment can have a significant impact on financial planning and tax filing for many families. Therefore, it is crucial to understand how these changes affect taxpayers.
Basics of the Child Tax Credit in 2025
The Child Tax Credit is a provision that seeks to reduce the tax pressure on families. Allows parents to claim up to $2,000 for each child under 17 who meets certain requirements. However, once a child reaches age 17, they lose eligibility for the CTC, although they could still qualify as a dependent for other tax credits or deductions.
When a child turns 17, families can consider other alternatives, such as the Other Dependents Credit or educational tax credits. The loss of the CTC could affect the financial situation of families, but the fact that the child begins to work and contribute financially to the home can partially alleviate these needs.
For U.S. citizens living abroad, claiming the Child Tax Credit may present additional challenges. Issues such as foreign income exclusions and variations in tax treaties can complicate the application process. These aspects should be carefully considered when evaluating eligibility for the CTC.
Trump Could Introduce Changes and Trump the Child Tax Credit in 2025
The CTC could see a quite-large reduction if the Donald Trump administration decides not to extend the Tax Cuts and Jobs (TJCA) act that was enacted in 2017 and expires in 2026.
This legislation had expanded the CTC to include youth up to 17 years old, a modification that was implemented during the term of former President Joe Biden. However, with Trump’s return to the White House, uncertainty remains over whether current benefits will be maintained or whether some of these changes will be reversed.
The Child Tax Credit is a key component of the U.S. tax system that provides up to $2,000 per qualifying child to families with incomes within certain limits. Currently, the limits to access these benefits are $200,000 for individual taxpayers and $400,000 for couples filing joint returns.
If the TJCA is not extended, income thresholds could decrease dramatically, limiting access to these credits to individual taxpayers with incomes up to $75,000 and $110,000 for couples. This situation could affect millions of families, modifying their financial planning and access to economic support based on raising children.
