2025 Child Tax Credit (CTC) Update

The Child Tax Credit is one of the most valuable benefits for working families. For tax year 2025, the credit remains at up to $2,000 per qualifying child under the age of 17. However, there are some important features and adjustments that could impact your eligibility and refund potential.

 What’s New or Important for 2025?

• Up to $1,600 of the credit is refundable in 2025 (also known as the Additional Child Tax Credit).

• Families can calculate the refundable portion using either their 2025 or 2024 earned income — whichever provides the greater refund.

• The refundable amount increases gradually with income above $2,500 in earned income.

Who Qualifies?

To qualify for the 2025 Child Tax Credit, your child must:

• Be under age 17 at the end of 2025

• Be your biological child, stepchild, foster child, sibling, or a descendant (e.g., grandchild)

• Live with you for more than half the year

• Not have provided more than half of their own support

• Be claimed as your dependent and be a U.S. citizen, U.S. national, or U.S. resident alien

Income Phase-Outs

The credit begins to phase out when modified adjusted gross income (MAGI) exceeds:

• $200,000 for single/head of household filers

• $400,000 for married couples filing jointly

Planning Tip

If your income changes significantly from year to year, using the prior-year income option for the refundable portion could result in a larger refund. This is especially helpful for families who had lower income in 2024 than 2025.

Need help determining how to claim or calculate your Child Tax Credit? Reach out to our team for a review before tax season starts.

Source: IRS – Child Tax Credit Overview