Child Tax Credit
A U.S. federal tax credit that reduces the income tax owed by families with qualifying children, up to $2,000 per child in 2024–2025.
What is Child Tax Credit?
The Child Tax Credit (CTC) is a federal income tax credit available to taxpayers with qualifying dependent children under age 17. For tax years 2024–2025, the maximum credit is $2,000 per qualifying child, of which up to $1,700 is refundable as the Additional Child Tax Credit (ACTC) — meaning families may receive a refund even if their tax bill is less than the credit amount. The credit phases out at higher income levels: $200,000 for single filers and $400,000 for married filing jointly (in 2024). A qualifying child must be under 17, have a valid Social Security Number, live with the taxpayer for more than half the year, and meet relationship and dependency tests. The CTC was temporarily expanded under the American Rescue Plan (2021) to $3,000–$3,600 per child with monthly advance payments — an expansion that was not renewed for 2022 and later years.
Example
A married couple with two qualifying children ages 8 and 12 and an AGI of $120,000 claims the full $2,000 per child = $4,000 total Child Tax Credit. Their federal income tax liability before credits is $6,500. After applying the $4,000 CTC, they owe $2,500 in federal taxes. The CTC directly reduces their tax dollar-for-dollar — a more valuable benefit than a deduction of the same amount.
Source: IRS — Child Tax Credit and Additional Child Tax Credit