Everything You Need To Know On Child Tax Credit For Maximum Benefits 

The Child Tax Credit stands out as a beacon of financial relief for families. As a parent or guardian navigating the tax season for years, understanding this valuable credit can make a significant difference in your financial planning.

What is the Child Tax Credit?

The Child Tax Credit is a tax benefit designed to provide financial support to families with qualifying children. It directly reduces the amount of taxes you owe, and in some cases, it can even increase your refund. The goal is to help parents cover the costs of raising children while reducing their tax burden.

The maximum credit per child is $2,000. Up to $1,700 of this amount is refundable, meaning if your tax bill is lower than your credit, you may receive the remaining amount as a refund.

The refundable portion is known as the Additional Child Tax Credit (ACTC).

Eligibility Criteria

To qualify for the Child Tax Credit, you must meet specific requirements set by the IRS. Here is a breakdown of the key eligibility criteria:

• Age Requirement: The child must be under 17 years old by the end of the tax year.
• Relationship to the Claimant: The child must be your son, daughter, stepchild, foster child, sibling, half-sibling, or descendant (grandchild, niece, or nephew).
• Financial Support: You must have provided more than half of the child’s financial support throughout the year.
• Residency Requirement: The child must have lived with you for at least six months during the tax year.
• Income Limits: Your adjusted gross income (AGI) determines how much of the credit you can claim. Your annual income should not be more than $200,000 for single filers and $400,000 for married couples filing jointly. Parents and guardians with higher incomes may be eligible to claim a partial credit.
• Citizenship Requirement: The child must have a valid Social Security Number (SSN) and be a U.S. citizen, U.S. national, or U.S. resident alien.

How To Claim The Child Tax Credit 

• File Form 1040 
• Attach Schedule 8812: This form calculates the refundable portion of your credit (Additional Child Tax Credit).
• Provide the Child’s SSN 
• Check Your Income:  If your income exceeds the threshold, the credit amount may be reduced, so make sure to calculate accordingly.
• Use Tax Software or consult a tax Professional

At Campaign for Working Families, we offer Volunteer Income Tax Assistance (VITA). This program helps to reduce financial hardship for individuals and families by connecting them to vital tax credits like the Child Tax Credit. For more information visit https://www.cwfphilly.org or call (215)454-6483 for assistance. 

Tips to Maximize Your Child Tax Credit Benefits

• File Early: Filing your taxes as soon as possible reduces delays and ensures you receive your refund faster.
• Keep Accurate Records: Maintain records of your child’s SSN, birth certificate, and proof of residency to avoid issues.
• Stay Informed on Tax Law Changes: Follow IRS updates to ensure you are taking advantage of all available credits.
• Check for Additional credits: You may qualify for other tax credits like the Earned Income Tax Credit (EITC) or the Child and Dependent Care Credit, which can further reduce your tax burden.

2025 Earned Income Tax credit and other Refundable credits chart