4 Things New Parents Need To Know About the Child Tax Credit in 2025
Written by
Josephine Nesbit
Edited by
Amber Barkley
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The child tax credit (CTC) is a partially refundable tax break claimed by millions of Americans each year to help offset the costs of raising a child. Most parents with children under the age of 17 at the end of the 2024 tax year may qualify for the tax credit.
If you’re a new parent, here are four things you need to know about the child tax credit in 2025.
What Is the Child Tax Credit?
The child tax credit is a federal income tax credit that helps families with qualifying children under the age of 17 get a tax break. The credit is also partially refundable, known as the additional child tax credit (ACTC). This means families may receive a tax refund if the credit amount is greater than taxes owed before applying the credit.
If you’re a new parent who had a child in 2024, you’ll want to claim the CTC on your 2024 tax return. But to take full advantage of the tax break, you’ll need to know whether or not you’re eligible, how the credit is calculated and how to claim the credit.
Do New Parents Qualify?
According to the IRS, new parents may qualify even if their child was born on Dec. 31, 2024. Here are additional requirements for your dependent, per IRS rules:
- Under age 17 at the end of the 2024 tax year
- Meet relationship requirements: son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister or a descendant of one of these
- Not provide more than half of their own support
- Lived with you for over half the year
- Claimed as your dependent
- Not file a joint return
- U.S. citizen, U.S. National or a U.S. resident alien
- Have a Social Security number.
How Much Is the Child Tax Credit?
For the 2024 tax year, the credit is up to $2,000 per child, up to which $1,700 per child may be refundable.Â
According to Congress.gov, the CTC phases out for higher-income families. Parents may only claim the full amount if their child meets all eligibility requirements and their annual income does not exceed $200,000, or $400,000 if filing a joint return.
For every $1,000 of modified adjusted gross income (MAGI) above the threshold amount, the value of the CTC reduces by $50. In general, it takes $40,000 of MAGI above the phaseout threshold to completely phase out the $2,000 credit.
How To Claim the Child Tax Credit in 2025
To claim the CTC, enter your children and other dependents on Form 1040, U.S. Individual Income Tax Return, and attach a completed Schedule 8812, Credits for Qualifying Children and Other Dependents.
You can also claim the CTC if you file your taxes electronically. The platform you use will walk you through each step and automatically calculate the CTC for you.
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