newsMarketingTax CreditChild Tax Credit Increased to $2,200 per Child for Tax Year 2025

The Internal Revenue Service (IRS) has introduced an important update for families as part of the tax provisions applicable to tax year 2025 (filed in 2026). The Child Tax Credit (CTC) has been increased to up to $2,200 per qualifying child, offering additional financial relief to millions of households across the United States.

This adjustment reflects ongoing efforts to align tax benefits with inflation and rising costs of living, while continuing to support families raising children.

📌 What Is the Child Tax Credit?

The Child Tax Credit (CTC) is a federal tax credit designed to help taxpayers offset the costs of raising children. Unlike deductions, which reduce taxable income, a tax credit directly reduces the amount of tax owed — dollar for dollar.

For tax year 2025:

  • The maximum CTC increases from $2,000 to $2,200 per qualifying child
  • The credit applies to children who meet specific age, relationship, residency, and citizenship requirements

💰 What Changed for Tax Year 2025?

The key update for 2025 is the increase in the maximum credit amount:

  • Up to $2,200 per qualifying child
  • Applies to each eligible child claimed on your return
  • A portion of the credit may be refundable, meaning you could receive money back even if you owe little or no federal income tax

This increase helps preserve the real value of the credit amid inflation and rising household expenses.

👶 Who Is a Qualifying Child?

To claim the Child Tax Credit for tax year 2025, the child must generally:

  • Be under age 17 at the end of 2025
  • Be your son, daughter, stepchild, foster child, sibling, or descendant
  • Have lived with you for more than half the year
  • Be claimed as a dependent on your return
  • Be a U.S. citizen, U.S. national, or resident alien
  • Have a valid Social Security number

📉 Income Limits and Phase-Out Rules

The Child Tax Credit is subject to income phase-outs based on Modified Adjusted Gross Income (MAGI):

  • Phase-out begins at:
    • $200,000 for Single and Head of Household filers
    • $400,000 for Married Filing Jointly
  • The credit is reduced as income exceeds these thresholds

Families with incomes below these limits may qualify for the full $2,200 per child, while higher-income households may receive a reduced credit.

🔁 Refundable Portion of the Credit

A portion of the Child Tax Credit may be refundable through the Additional Child Tax Credit (ACTC). This means eligible taxpayers could receive part of the credit as a refund even if their tax liability is reduced to zero.

Refundability rules depend on:

  • Earned income levels
  • Number of qualifying children
  • IRS-established limits for the year

📄 How to Claim the Credit

To claim the Child Tax Credit:

  1. File Form 1040 or Form 1040-SR
  2. Include each qualifying child with a valid Social Security number
  3. Complete Schedule 8812, if required, to calculate the credit and any refundable portion

Accurate documentation and proper dependency claims are essential to avoid delays or IRS notices.

👨‍👩‍👧‍👦 Why This Matters for Families

The increase to $2,200 per child can significantly impact household finances by:

  • Reducing federal income tax owed
  • Increasing refunds for eligible families
  • Helping offset everyday costs such as childcare, education, food, and healthcare

For families with multiple qualifying children, the total benefit can add up quickly.

🧠 Planning Tips

  • Review your withholding or estimated tax payments to reflect the higher credit
  • Ensure all dependent information is accurate and consistent
  • Keep Social Security cards and residency records readily available
  • Consult a tax professional if income levels are near phase-out thresholds

📌 Final Thoughts

The enhanced Child Tax Credit of up to $2,200 per qualifying child for tax year 2025 represents meaningful relief for families and reinforces the IRS’s commitment to adjusting tax benefits for economic realities. Proper planning and accurate filing will ensure you receive the maximum benefit available when you file your 2025 return in 2026.

If you have children and meet the eligibility requirements, this credit could play a major role in lowering your overall tax burden.