If you’re a parent, there’s good news this tax season: the long-awaited Child Tax Credit (CTC) can help you recover up to $2,000 for each qualifying child. It is one of the most used tax benefits, with more than 46 million people claiming it each year. Plus, it’s partially refundable, meaning you could receive money even if you owe little or nothing to the Internal Revenue Service (IRS).
The credit is up to $2,000 for each child under 17 years of age. But beware: if Congress doesn’t act, this benefit could be drastically reduced in 2026. So for now, make the most of it!
The Child Tax Credit helps millions of families in America
This credit has existed since 1997, when it began with a value of $500 per child and was non-refundable. Over time, adjustments have been made to expand its scope and amount. In 2017, the Tax Cuts and Jobs Act raised it to $2,000.
In 2021, the American Rescue Plan temporarily increased it to $3,600 for children under 6 years old and $3,000 for those ages 6 to 17. He also made it fully refundable and allowed for advance monthly payments. But that increase only lasted a year, and it has since returned to its $2,000 value.
How much can you receive in 2024 from the CTC?
For tax year 2024 (in short, the 2025 return you have to file now), the CTC remains up to $2,000 per child under age 17. But not all of the amount is refundable: the refundable portion, known as the Additional Child Tax Credit (ACTC), reaches a maximum of $1,700.
The IRS doesn’t issue ACTC refunds before mid-February, but if you file electronically and set up direct deposit, you could receive the money before March 3.
To be eligible, you must meet these requirements:
- Be a US citizen or resident foreigner with certain eligible statuses.
- Have a modified adjusted gross income of $400,000 or less if you file jointly with your partner, or $200,000 or less if you file alone.
- Claim credit for a biological child, adopted child, stepchild, or even a sibling or grandchild under your guardianship.
The child in question must:
- Be under 17 years old as of December 31, 2024.
- Be declared as a dependent on your tax return.
- Have a valid Social Security number.
- Have lived with you at least half of the year.
- Not having covered more than half of their own expenses in 2024.
Income limits for the CTC tax credits
If you file as a couple and your adjusted gross income is $400,000 or less, you can receive the full credit. If you earn more, the amount is reduced by $50 for every $1,000 you exceed that limit. The credit disappears completely if income exceeds $480,000 on joint returns (or $240,000 for other taxpayers).
To claim that cash, and don’t leave it to the IRS (you’ll use some extra cash, don’t you?), you just have to include your children on Form 1040 and attach Schedule 8812. If you file your taxes online, platforms like TurboTax and FreeTaxUSA allow you to claim it at no cost in their free plans. In fact, TurboTax estimates that 37% of its users qualify for its no-cost tier.
So now you know, if you meet the requirements, don’t miss this benefit. That extra money can be great for you.