Q: How much is the Child Tax Credit in 2025?
For 2025, the Child Tax Credit (CTC) is $2,000 per qualifying child under age 17, the same per-child amount set by the Tax Cuts and Jobs Act of 2017 (IRC § 24). The refundable portion — the Additional Child Tax Credit (ACTC) — is capped at $1,700 per child for 2025, up from $1,600 in 2024 thanks to inflation indexing under the SECURE 2.0 Act of 2022. The credit begins phasing out at modified AGI of $200,000 for single filers and $400,000 for joint filers, reducing by $50 per $1,000 of income above those thresholds. Unless Congress acts, the per-child amount drops to $1,000 in 2026 when many TCJA provisions sunset.
Q: What is the refundable portion (ACTC)?
The Additional Child Tax Credit (ACTC) is the refundable portion of the CTC, meaning you can receive it as a refund even if you owe zero federal income tax. For 2025, up to $1,700 per qualifying child is refundable, calculated as 15% of earned income above $2,500 — so a filer with $12,500 of earned income could refund up to $1,500 ($10,000 × 15%). When your tax liability is too low to use the full $2,000 non-refundable credit, Form 8812 transfers the unused portion to the refundable ACTC, subject to the per-child cap. The refund can be offset by federal debts, past-due child support, and certain state tax obligations, and claiming it requires each child to have a valid SSN issued before the return's due date.
Q: What are the income phase-outs for the Child Tax Credit?
The CTC phases out at $50 per $1,000 of modified AGI above $200,000 for single, head-of-household, and married-filing-separately filers, and above $400,000 for joint filers. A married couple with two children ($4,000 credit) and MAGI of $480,000 would lose the entire credit ($80,000 above threshold × $50/$1,000 = $4,000). The phase-out thresholds are not indexed for inflation under current law, meaning more families become exposed to them each year as wages rise. The same $200,000/$400,000 thresholds apply to the $500 Other Dependent Credit for non-CTC dependents, but that credit is entirely non-refundable and phases out under the same $50-per-$1,000 formula.
Q: Who qualifies as a qualifying child for the CTC?
Under IRC § 24(c), a qualifying child must be under age 17 at the end of the tax year and your son, daughter, stepchild, foster child, sibling, half-sibling, step-sibling, or a descendant of any of them (such as a grandchild or niece/nephew). The child must have lived with you for more than half the year, not have provided more than half of their own support, and be claimed as your dependent on your return. They must be a U.S. citizen, U.S. national, or U.S. resident alien, and they must have a valid Social Security number issued before the tax return's due date — ITINs and ATINs do not qualify for the $2,000 CTC (though they may qualify for the $500 Other Dependent Credit). Special custody rules apply to divorced or separated parents under IRC § 152(e), generally requiring the custodial parent to release the claim via Form 8332.
Q: What happens to the Child Tax Credit in 2026?
Unless Congress extends the TCJA, the CTC reverts to $1,000 per qualifying child on January 1, 2026 — the level in effect from 2003 through 2017. The refundable portion would shrink to 15% of earned income above $3,000 (instead of $2,500) with a fixed cap, eliminating the recent inflation indexing. Phase-out thresholds would tighten from $200,000/$400,000 to $75,000/$110,000 (with a $55,000 married-filing-separately cap), exposing millions more middle-class families to reduced or eliminated credits. Several legislative proposals — including a 2024 bipartisan House bill and the 2025 family-security framework — have floated making the $2,000 amount permanent or expanding it to $3,000–$3,600, but as of late 2025 no extension has become law.
Q: What is the Other Dependent Credit?
The Other Dependent Credit (ODC) is a $500 non-refundable credit for dependents who do not qualify for the $2,000 CTC — typically children age 17 or older, elderly parents, and other qualifying relatives claimed under IRC § 152. Introduced by the TCJA in 2018, it replaced the prior personal exemption for dependents, which was suspended through 2025. The ODC uses the same $200,000 single / $400,000 joint phase-out thresholds as the CTC, reducing $50 per $1,000 of MAGI above the limit. Unlike the CTC, the dependent can have an SSN, ITIN, or ATIN, but the credit cannot generate a refund — it only offsets actual tax liability — and only one taxpayer can claim a given dependent in any tax year.