One of the most important aids for American families is about to arrive. We are talking about the Child Tax Credit that will be given in 2025. This payment is designed to reduce the economic impact of raising a child. A federal program that will not only free you from tax burden but can also provide direct refunds for those who meet the requirements.
2025 is full of news and millions of families will be able to claim this money, just now that the country continues in a great process of inflation, where prices do not stop rising and everything is increasingly more expensive. We are going to explain everything you need to know about this
When can you claim the Child Tax Credit (CTC)?
We already have a date for 2025 and, as we already know, this credit can be claimed as soon as the tax season begins. We explain it better, you will have to claim the 2024 CTC when you file your income tax return this coming year (2025), from January to April 15, which will be the last day to file the return. Once you file the return, in less than 21 days the IRS will give you a verdict and you will receive your refund.
How much will the refundable amount be for 2024?
The confirmed amount will be $1,700 per child. This same amount will be taken into account for 2025 (although with political changes it would not be surprising if this also changed in the coming years).
What are the requirements to qualify for the CTC?
These are the criteria that must be met, which, although they seem simple, are crucial for this process.
- First of all, age and relationship. The child must be under 17 years old at the end of this fiscal year. In addition, he or she must have a family relationship as a child, stepchild, foster child, brother, half-brother, or direct descendant (grandchild or nephew)
- Regarding the issue of residence, the minor must have lived with you for half of the year and cannot file a joint return (this means that he or she must never have worked) except to claim taxes that may be withheld.
- On the other hand, you must also have covered half of his or her support for this year. 4. Finally, the child must be a U.S. citizen (or at least a legal resident) and have a valid social security number.
Going over the salary limits imposed by the IRS could also reduce or eliminate the total credit.
How do you apply for this credit?
This process is very simple and is done at the same time as filing your annual tax return. The return includes Form 1040 or 1040-SR, so that is where you will have to include the information of the children who qualify for this payment and the details required to calculate this credit. You will need your children’s Social Security number, proof of residence, and proof of financial support.
Once you are confirmed eligible for this credit, you will not be reimbursed anything, it will be subtracted from the taxes you owe for that year, that is, what they do is a reduction of the taxes you owe. If the amount of money is greater than the taxes you owe, then you will be reimbursed to your bank account (the same one you included when filing your tax return).
Why is this credit so important for families?
Being aware that we live in an increasingly expensive world, where housing, health, and education are the main expenses of each family, this credit not only guarantees that the basic needs of our children are covered but also offers parents a break in their annual budgets.
In addition, we are in a historical moment in which birth rates are at an all-time low because life is very expensive, so this program seeks to reverse this situation by providing financial support that can make more families decide to have children.
If you qualify for it, do not hesitate to ask for it because it can make a difference in your family situation and that of your children. May our children have a good childhood and adolescence without noticing that the world is drowning us in inflation!