Will the Additional Child Tax Credit Expand in 2025? Here’s What to Expect

Additional Child Tax Credit: The Child Tax Credit (CTC) provides financial assistance to nearly 48 million low-income families in the U.S. to support the costs of raising children under age 17. For the 2025 tax year (claimed in 2026), the IRS has set the CTC at $1,700. However, discussions are expected to arise during the 2025 tax debate, with some policymakers advocating for a significant overhaul of the tax code that could affect the CTC amount.

The Center on Budget and Policy Priorities has recommended reinstating the expanded version of the Child Tax Credit from the 2021 American Rescue Plan, which raised the credit to $3,600 for children under 6 and $3,000 for those aged 6 to 17. This expansion played a major role in reducing child poverty, as estimates show that 2.6 million children would be lifted above the poverty line if these higher CTC amounts were restored.

When Will the Latest Student Loan Forgiveness Take Effect?

The Additional Child Tax Credit’s expansion was a campaign issue

While both presidential candidates discussed increasing the Child Tax Credit during their campaigns, Vice President Kamala Harris was thinking about bringing back the program that was a component of the American Rescue Plan 2021.

The credit may be revived at some point because both Donald Trump and Sen. JD Vance, his running mate, discussed it during their campaigns.

Additional Child Tax Credit: Who can have it?

The child’s age, relationship to the applicant, and financial circumstances are just a few of the requirements that must be fulfilled in order to qualify.

On your federal tax return, you can claim the Additional Child Tax Credit (ACTC). The standard Child Tax Credit Worksheet, which is included in the Form 1040 instructions, must be filled out first. You must fill out Schedule 8812 if you are eligible for the additional claim.

Is Your Social Security Income Taxable? Understand the Limits and Plan Ahead!

Up to $1,600 of the $2,000 for each eligible child can be refunded to you in 2024 and 2025 if the Additional Child Tax Credit lowers your tax liability to zero. The IRS has provided the following details regarding the prerequisites for applying for it:

• Prior to the due date of your tax return (including extensions), a qualifying child must have a Social Security number that has been issued by the Social Security Administration.
• If your adjusted gross income is more than $200,000 ($400,000 for married couples filing jointly), the Additional Child Tax Credit starts to phase out.
• If you or your spouse (if filing a joint return) file Form 2555 or Form 2555EZ (excluding foreign earned income), the ACTC is not permitted.