People in the United States will be able to claim the child tax credit when they file their 2024 taxes in 2025. People who are parents or legal guardians of minors and meet certain age and residency requirements can get this benefit. It has been a major source of tax relief for millions of families since it was put into place in 1997.
As long as the child is under 17 years old at the end of the tax year, the Child Tax Credit program will continue to let them get up to $2,000. About $1,700 of this amount can be returned, so families can get a check even if they do not owe a lot of tax.
Other requirements for the 2025 child tax credit
Everything is in order for the family to get the child tax credit. The children must also have a valid Social Security number and live with the taxpayer for more than half of the tax year.
Families with adjusted gross incomes of up to $200,000 for single returns and $400,000 for joint returns can get the full benefit. The total credit amount will go down by a proportional amount for people with higher incomes.
While the credit was the same in 2023 ($2,000 per qualified minor), it will not be different in 2024. This is different from the American Rescue Plan, which temporarily increased the credit during the pandemic and gave up to $3,600 per child. This law ran out in 2022, which caused a big rise in the number of poor children.
If nothing is done to change the law, the credit will go down to $1,000 per child in 2026. This could mean that families get less money back from their taxes.
Important dates to file taxes: don’t miss it
The IRS says that tax credits, like the Child Tax Credit, worth billions of dollars each year are not claimed. This mostly happens because eligible families do not know how to do their taxes or can not get to the resources they need.
The Internal Revenue Service (IRS) will make the tax filing system live on January 29, 2025. The Free File program will begin on January 12, 2025. Usually, you have until April 15 to file your taxes, unless you get an extension.
Remember that getting more time to file does not mean you have more time to pay your taxes. Any balance left over after April 15 will be charged interest and fees.
Child tax credits in other years in numbers
As part of the American Rescue Plan, the Child Tax Credit was temporarily raised during the COVID-19 pandemic. This meant that children under 6 years old could get up to $300 a month and children between 6 and 17 years old could get up to $250 a month. This gave each qualifying child a total benefit of up to $3,600. The Census Bureau says that this measure helped cut child poverty in the US by 46%.
Expanded credit payments kept 3.7 million kids from falling into poverty in 2021. But when the expansion ended in 2022, the rate of child poverty shot up from 5.2% to 12.4%, undoing a lot of the progress that had been made.
A study by the Urban Institute found that in 2021, about 92% of families who were eligible for the credit did so. However, 8% of households did not use the benefit. These were mostly low-income households that did not have access to tax preparation services.
The Child Tax Credit gave up to $400 to each child who qualified in its first year. This amount went up to $600 by 2001 and has kept going up on a regular basis since then.
According to the numbers, 67% of families use it to buy food and 39% use it to pay for their home, either through rent or mortgage. But 29% of them also use it to pay for basic things like water or electricity.
