What Is the Child Tax Credit and Who’s Eligible?

The Child Tax Credit is a valuable tax benefit for families with dependent children, currently offering up to $2,000 per qualifying child.

Why It Matters

The Child Tax Credit has helped to reduce poverty and improve the quality of life for millions of children. According to research from the U.S. Census Bureau, it lifted 2.1 million children out of poverty in 2021.

That year, the Child Tax Credit provided up to $3,600 per child under six and $3,000 per child aged six to 17. For 2025, the maximum child tax credit is $2,000 per qualifying child, unchanged from 2024. However, without legislative changes, the credit is set to revert to $1,000 per child starting in 2026.

What Is the Child Tax Credit?

The Child Tax Credit is a tax benefit designed to provide financial relief to families with dependent children. For the 2024 tax year, the full credit of $2,000 is available to individuals earning up to $200,000 and joint filers earning up to $400,000. The credit is partially refundable, meaning even if you don’t owe enough in taxes to utilize the full $2,000 credit, you can still receive up to $1,700 per child as a refund.

Who Is Eligible for the Child Tax Credit?

According to the IRS, to be eligible for the Child Tax Credit, the child must be a U.S. citizen, national or resident alien with a valid Social Security number. The child needs to be your son, daughter, stepchild, eligible foster child, sibling or descendant, such as a grandchild. The child must have lived with you for more than half of the tax year and must be under the age of 17 at the end of the tax year for which you are claiming the credit.

Parents or guardians must meet income requirements: a modified adjusted gross income of up to $200,000 for individuals or $400,000 for married joint filers to qualify for the full credit in 2024. After that, the credit is reduced by $50 for every $1,000 of income over the limit.

Additionally, the child must be claimed as a dependent and provide less than half of their financial support during the tax year to ensure the credit benefits those primarily responsible for the child’s well-being.

What People Are Saying

JD Vance, vice-president-elect, previously stated on Face the Nation with Margaret Brennan: “I’d love to see a child tax credit that’s $5,000 per child. President Trump has been on the record for a long time supporting a bigger child tax credit, and I think you want it to apply to all American families.”

Lisa A. Gennetian, Pritzker professor of early learning policy studies at Duke University, told Newsweek: “Lump sum tax credit transfers of this type offer financial relief to working families with children in different ways from paying off debt to buying children’s clothing or things they need for school. We are also learning that fears about this type of tax relief leading to large reductions in parents working are not born out; families use tax credits to make good investments.”

Anna Gassman-Pines, professor of public policy, psychology and neuroscience at Duke University, told Newsweek: “We know that it is expensive for families to raise children in the United States. The CTC helps parents spend money in ways that support child development, leading to better health and well-being in the long run. So not only is the CTC a direct support for families now but also an investment in the future, because today’s children are tomorrow’s workers and community members.”

Mark Luscombe, principal federal tax analyst at Wolters Kluwer Tax & Accounting, previously told Newsweek: “Congress needs to act this year to extend some of the expiring provisions of the Tax Cuts and Jobs Act or deductions such as the standard deduction would be reduced and tax credits such as the Child Tax Credit would be reduced.”

What Happens Next

Gennetian warns cutting the child tax credit without enhancing services like childcare could have a negative impact on middle- to upper-income families. It could also signal a lack of government support for American families. She believes a broad expansion of the Child Tax Credit, like in 2021, is unlikely. However, she is cautiously optimistic about potential targeted expansions of Child Tax Credit provisions, citing bipartisan support “for pro-family policies.” She suggests possible expansions could include larger lump sum payments at birth or increased amounts “to parents who have very low earnings.”