Additional Child Tax Credit : Who Qualifies and How to Claim Your Refund in the U.S
The program was designed to alleviate the financial burden of those with minor dependents. This credit allows taxpayers to receive up to $1,600 for each child.
As of March 2025, low-income families in the
United States will be able to benefit from the Additional Child Tax Credit
(ACTC), a program designed to alleviate the economic burden of those who have
minor dependents.
As reported by the Marca portal, this credit
allows taxpayers to receive up to US$1,600 for each qualifying child, even if
they are not required to file a regular tax return.
Those who e-file their tax return and select
the direct deposit option could receive the refund as early as March 3, 2025,
provided there are no problems with their return.
Requirements to qualify for the ACTC in 2025
The Internal Revenue Service (IRS) establishes
a number of criteria that must be met for a child to be considered eligible for
the ACTC. The main requirements include:
- The minor must be under the age of 17 at the
end of the tax year.
- Must be a biological child, stepchild,
adopted child, sibling, step-sibling, half-sibling, or lineal descendant of any
of these (such as grandchildren, nieces or nephews).
- Must not have contributed more than one-half
of his or her own support during the tax year.
- Must have resided with the taxpayer for more
than half of the tax year.
- Must be claimed as a dependent on the
taxpayer's tax return.
- Cannot file a joint return with another
person, except solely to claim a refund of withholding or estimated tax.
- Must be a U.S. citizen, U.S. national or
resident alien.
- The child must have a valid Social Security
number to work, issued before the due date of the tax return (including
extensions).
These criteria are intended to ensure that the
credit only benefits families who truly depend on this support to cover the
expenses related to their children.
ACTC Limits and Restrictions
The maximum amount refundable from the ACTC for
2025 will be $1,600 per qualifying child. However, this benefit begins to be
reduced if the taxpayer's adjusted gross income exceeds $200,000 ($400,000 for
couples filing jointly).
In addition, there are additional restrictions
for those attempting to claim this credit. The ACTC is not available to
taxpayers using Forms 2555 or 2555-EZ, which are used to exclude foreign-earned
income. This means that individuals who work outside the United States and seek
to exclude their foreign income will not be able to access this benefit.
How to claim the ACTC
To claim the ACTC, taxpayers must complete the
standard tax return form, either Form 1040 or Form 1040-SR, and follow the
instructions on Schedule 8812. This schedule is essential for determining
whether the taxpayer qualifies for the additional credit and calculating the
corresponding amount.
The process begins with the Child Tax Credit
worksheet included in the instructions for the return form. If the amount of
the credit exceeds the taxpayer's tax liability, Schedule 8812 allows you to
calculate the additional refund you may receive. This credit works as a
dollar-for-dollar reduction of taxes owed, making it a valuable tool for
families facing financial hardship.
