Child Tax Credit: How it works and who qualifies this year

The Child Tax Credit is a valuable tax benefit claimed by millions of parents with the goal of offsetting the costs of raising a child.

The Child Tax Credit for 2025 is worth up to $2,200 for each qualifying child for returns filed in 2026, up from $2,000  for the Child Tax Credit for 2024 taxes  based on new rules from the One Big Beautiful Bill Act (OBBBA).

In this post, we’ll outline all the details about the Child Tax Credit and the Additional Child Tax Credit. And, we’ll answer questions such as “How much is the child tax credit?”

Read on to find out all about this popular credit.

• Who qualifies for the Child Tax Credit
• Additional Child Tax Credit
• How to claim the IRS Child Tax Credit 2025
• Child Tax Credit 2025 FAQs

What is the Child Tax Credit for 2025?

Simply stated, the Child Tax Credit (CTC) is a tax credit for eligible families with dependent children under age 17. Taking the credit can help lower your tax bill dollar-for-dollar—and depending on how much you owe, it may reduce your taxes owed down to zero.

Like many tax benefits, you must meet certain requirements before you can claim the Child Tax Credit each tax year. These include details about the dependent child, the relationship between you and the child, and your income. We’ll get into these details below as we review who qualifies for the Child Tax Credit.

Is the Child Tax Credit refundable?

The Child Tax Credit by itself is not a refundable credit. But, the related credit, called the Additional Child Tax Credit, is refundable. This article covers the Child Tax Credit and the Additional Child Tax Credit details for both, but here are the major takeaways:

• The nonrefundable Child Tax Credit can reduce your tax to zero. If the amount of your credit is higher than the taxes you owe, you don’t “get back” the rest of the credit as a refund, but you may be eligible for the Additional Child Tax Credit.
• The refundable Additional Child Tax Credit kicks in if you have any part of the Child Tax Credit remaining and you have earned income, as explained below.

How much is the 2025 Child Tax Credit?

For 2025 taxes (for returns filed in 2026), the IRS Child Tax Credit is worth up to $2,200 for each qualifying dependent child. You can claim this full amount if your income is at or below the modified adjusted gross income threshold (see the income phase out information below).

The refundable Additional Child Tax Credit (ACTC) is worth up to $1,700 per qualifying child.

2024 vs. 2025 Child Tax Credit updates

In July of 2025, Child Tax Credit Big Beautiful Bill Act changes became law and increased the maximum amount of the credit.

Here’s a recap of the max for both years:  

• Child Tax Credit 2024 – Up to $2,000
• Child Tax Credit 2025 – Up to $2,200

It’s worth noting that with the new rules for the Child Tax Credit from the One Big Beautiful Bill Act,  value of the credit will now be indexed for inflation. The ACTC has been indexed for inflation since 2018.  

Who qualifies for the Child Tax Credit? Income limits, dependents and special cases

Qualifying for the Child Tax Credit is about more than just having a child in your home. In fact, there are eight requirements, or “tests,” that must be met for the child to be treated as “your qualifying child.”

Let’s dig into them:

• Age: The child must be under age 17 at the end of the tax year.
• Dependent status: The child must be allowed as a dependent on your tax return.
• Relationship: The child must be your own child, stepchild, sibling, or a descendant of your child, stepchild, or sibling.* It also includes a foster child placed with you by an authorized placement agency.
• Citizenship: The child must be one of these: a U.S. citizen, a U.S. national, or a U.S. resident.
• Financial support: The child must not have provided more than half of their own support.
• Residency: The child must have lived with you for more than half of the tax year. There are exceptions for divorced or separated parents, where the child may live with the other parent for more than half the year, but you still may be able to claim the child.
• Filing status: The child must not have filed a joint return, except in certain cases where they filed only to claim a refund of withheld income tax or estimated taxes.
• Social Security number (SSN): Your qualifying child’s SSN which must be valid for work in the U.S. and is issued before the due date of your tax return.

On top of these tests, you must also have an SSN valid for work in the U.S. (or your spouse if you file jointly) and you must meet income thresholds to take full benefit as the credit phases out for high earners. Read on to understand how the phase out works.

*This includes adopted children. Parents of adopted children may also want to learn about the Adoption Tax Credit.

Child Tax Credit income limit and phase-out

The Child Tax Credit amounts change as your Modified Adjusted Gross Income (MAGI) increases. In fact, once you reach a certain threshold, the credit amount decreases or phases out.

And the credit amount is reduced by $50 for every $1,000—or fraction thereof—that your modified AGI is more than:

• $200,000 if filing as Single, Head of Household, Married Filing Separately or 
• $400,000 if Married Filing Jointly (or Qualifying Surviving Spouse)

With the changes from the OBBBA, these thresholds are now permanent.

For this credit, your MAGI is your AGI plus excluded foreign earned income, excluded foreign housing costs, deducted foreign housing expenses, and excluded income for bona fide residents of American Samoa and Puerto Rico.

Additional Child Tax Credit

The Additional Child Tax Credit (ACTC) is the refundable portion of the Child Tax Credit. The ACTC may be an added tax credit option if your tax liability is very low. If you don’t owe any taxes at all, it may not seem like there’s a benefit of filing a return. However,  you could benefit from filing and claiming the refundable Additional Child Tax Credit.

This is where the difference between a refundable vs. nonrefundable tax credit matters. Claiming the ACTC means you could receive money back. The maximum refundable portion of the Additional Child Tax Credit is limited to $1,700 per qualifying child for 2025.

Additional Child Tax Credit 2025 requirements

The same requirements that apply to the Child Tax Credit also apply to the Additional Child Tax Credit. What’s more, your earned income must be more than $2,500 to qualify. The ACTC is equal to 15% of your earned income over the $2,500 threshold. The maximum ACTC is the smaller of the remaining CTC after reducing your tax to $0 or $1,700 per qualifying child.

If you have three or more qualifying children, you can  claim a refundable credit of the net Social Security and Medicare tax you paid in excess of your Earned Income Credit (EIC), if this results in a higher credit.

Is the Child Tax Credit automatically included in my return?

No, the Child Tax Credit isn’t automatically included on your return. But if you qualify for the credit, you can claim it on Form 1040 each year.

The following section outlines how to claim the Child Tax Credit.

How to claim the IRS Child Tax Credit 2025 – Step by Step

1. Confirm eligibility – To qualify for the CTC, each child must meet the criteria for age, relationship, residency support, citizenship, and have a Social Security number valid for work in the U.S. See above for details.
2. Gather required documents – Ensure you have Social Security numbers for each child, forms showing your income (W-2, 1099s) and your prior year tax return if applicable.
3. Complete IRS Forms: First use  Schedule 8812 to figure out how much of the Child Tax Credit/Additional Child Tax Credit you’re eligible to receive.
4. File Your Tax Return – File electronically or by mail by **TaxDeadlineLong** and attach Schedule 8812 to your Form 1040.

How to claim Child Tax Credit without a CPA or tax pro

You don’t have to work with a CPA or tax pro to claim the Child Tax Credit. You can do-it-yourself and use H&R Block Online to claim the credit and file your return.

1. Confirm eligibility
2. Gather your required documents.
3. Complete the online programs interview by answering the relevant questions.
4. File your return in the product.

When to expect your Child Tax Credit refund

The typical timeframe for the Internal Revenue Service (IRS) to issue a refund is 21 days or less if you’ve filed electronically and chosen to receive your refund by direct deposit.

However, if you have anything missing or have errors on your return, it could require additional review. It’s a good idea to double-check your return to avoid this extra processing time. Additionally, the IRS is moving away from paper checks starting in 2025,  and are implementing a new procedure to provide a paper refund check, so it will take longer to receive your refund if you’ve chosen a paper check, of course, as you may also encounter longer mail times.

Note: IRS is required by law to hold refunds that include the Earned Income Credit or Additional Child Tax Credit until mid-February. Additionally, you can’t carry forward any portion of the federal Child Tax Credit to future tax years.

Child Tax credit FAQs

Still have CTC questions? Review our frequently asked questions for additional clarity on Child Tax Credit updates and other details about this dependent tax credit.

Do I qualify for the Child Tax Credit if I’m divorced or share custody?

Yes, you can qualify for the credit if you share custody, but two people can’t claim the credit for the same child in the same year. Many parents will trade-off, claiming the credit every other year.  

However, if the parents have a qualifying agreement for the noncustodial parent to claim the child, the noncustodial parent who claims the child as a dependent is eligible to claim the Child Tax Credit. The custodial parent must provide the noncustodial parent with a signed Form 8332. A divorce decree or other agreement is not sufficient for the noncustodial parent to claim the child.

A parent can claim the CTC or ACTC if their filing status is Married Filing Separately.

Learn about the IRS rules to claim a dependent.

Can I claim the Child Tax Credit if I’m unemployed and received benefits?

Receiving unemployment income won’t disqualify you from claiming the Child Tax Credit. However, because this credit reduces the tax you owe, you must have some taxable income to claim it.

If your tax liability (what you owe in taxes for 2025) is below $2,200, then you will not be able to use the full amount of the credit. This may be the case for you if unemployment benefits were your only source of income, or if your income has been greatly reduced this year. However, you may be able to claim the Additional Child Tax Credit if you have sufficient earned income.

There are other tax credits that may be affected by unemployment. You must have earned income in the year to claim either of these credits: the Earned Income Tax Credit (EITC) and the Child and Dependent Care Credit.

Can you get the Child Tax Credit with no earned income?

Yes, you don’t need to earn an income to claim the Child Tax Credit, as long as your primary residence is in the U.S. for more than half a tax year and you have a qualifying child. For example, you may have retirement income and investment income. If your tax liability is not more than the Child Tax Credit, you would need earned income to claim the Additional Child Tax Credit.

Can I get the Child Tax Credit if I only worked part time or have gig work ?

Yes, you may still qualify for the Child Tax Credit even if you worked part time or earned income through gig work. As long as you meet the income requirements and your child meets the eligibility criteria, your work status doesn’t prevent you from claiming the credit.

Can you claim the Child Tax Credit for self-employed or 1099 income (freelance)?

Absolutely. If you’re self-employed or receive 1099 income, you can still claim the Child Tax Credit. What matters is your total income and whether your child qualifies—not how you earn that income.

Can grandparents claim Child Tax Credit for dependents?

Yes, grandparents can claim the Child Tax Credit if the child lives with them, they provide more than half of the child’s support, and the child meets the IRS’s qualifying criteria. These requirements are the key to being eligible to claim the child as a dependent.

Is the Child Tax Credit income limit for married vs single different?

Yes, the income limits vary based on your filing status. Married couples filing jointly have a higher income threshold than single filers. This means married taxpayers may qualify for the credit even with a higher combined income.

Can I still claim the Child Tax Credit if I didn’t owe any taxes?

The Child Tax credit, as a nonrefundable credit, can only reduce your tax bill to zero. In other words, if you didn’t owe any taxes, there would be no benefit to claiming the child tax credit.

However, you can claim the Additional Child Tax Credit even if you don’t owe any taxes. As a refundable credit, you may receive a refund if you are eligible for the Child Tax Credit and have sufficient earned income.

Can I claim the Child Tax Credit if I invest?

Yes, having investment income doesn’t disqualify you from claiming the Child Tax Credit. As long as your total income falls within the IRS limits and your child meets the eligibility rules, you can still qualify.

How is the Child Tax Credit different from the Child and Dependent Care Tax Credit?

Although they sound somewhat alike, the Child Tax Credit and the Child and Dependent Care Credit are two different credits with separate rules and qualifications.

• The Child Tax Credit is a tax benefit for taxpayers with children under age 17.
• The Child and Dependent Care Credit is a credit designed for those who have young children under age 13 or disabled dependents (such as a disabled parent) requiring child care or dependent care while the taxpayer works.

What is the Other Dependent Credit (ODC)?

The Credit for Other Dependents is a $500 nonrefundable dependent tax credit available to families with eligible dependents. You can claim the ODC in addition to the Child and Dependent Care Credit and the Earned Income Credit.

If your child is 17 years old or older at the end of the tax year and no longer eligible for the Child Tax Credit, you may want to consider taking the Credit for Other Dependents.

Is there a state-level CTC in addition to the federal tax credit?

Yes, several states have state-specific Child Tax Credits and eligibility requirements will be different for each state. Visit the Department of Revenue website in your state for specific guidelines, or connect with a Tax Pro.

Does the CTC still include an advance payment?

No, the monthly Advance Child Tax Credit payments were part of the American Rescue Plan Act of 2021 and were specific to the Child Tax Credit in 2021. The legislation also increased the value of the credit (referred to as the expanded Child Tax Credit at the time). As a result of this change, the IRS distributed the child tax credit payment to eligible taxpayers in monthly payment installments. Half of the credit was distributed as an advance Child Tax Credit over six months in 2021. Under current tax law, the CTC doesn’t include advance payments.

Get help claiming the Child Tax Credit with H&R Block

Have questions or ready to file your Schedule 8812? We’re here to help! Whether you choose to file with a tax pro or file with H&R Block Online, you can rest assured that we’ll get you the biggest refund possible.