If you have kids and file taxes, you’re probably familiar with the Child Tax Credit (CTC). For 2025, there are some important updates you should know about, thanks to the One Big Beautiful Bill Act (OBBBA). Here’s a breakdown of the 2025 Child Tax Credit changes and what they mean for your family.
Bigger 2025 Child Tax Credit Amount
The maximum Child Tax Credit is going up to $2,200 per qualifying child (it was $2,000 before). Remember this applies to qualifying children who are under the age of 17.
Refundable Portion Stays the Same (for now)
Up to $1,400 of the credit can be refunded to you, even if you don’t owe any taxes. This part will also be adjusted for inflation in future years.
No More Expiration Worries
The enhancements to the CTC that were set to expire after 2025 are now permanent. This includes the higher credit amount, higher income limits before the credit phases out, and the partial credit for other dependents. As with other changes in the OBBBA, this one gives us a little certainty, which we love when it comes to tax law!
Income Limits
As always, there are income limitations. The credit starts to phase out if your modified adjusted gross income is over $400,000 (for married couples filing jointly) or $200,000 (for everyone else). These limits are staying the same and are not adjusted for inflation.
Stricter Social Security Number (SSN) Rules
To claim the credit, both the taxpayer (or at least one spouse on a joint return) and each qualifying child must have a valid SSN issued by the due date of the tax return.
Inflation Adjustments Coming
Starting in 2026, both the maximum credit and the refundable portion will be adjusted for inflation, so the amounts could go up in future years.
Credit for Other Dependents
The $500 nonrefundable credit for other dependents (like older children or relatives who don’t qualify for the main CTC) is still available. Remember that when the kiddos hit 17 years of age, the non-refundable credit of $500 kicks in.
When Do These 2025 Child Tax Credit Changes Start?
All these updates apply to tax years beginning after December 31, 2024. So, you’ll see them when you file your 2025 tax return.
Please remember that these tax law changes are new for 2025, and clarification continues to trickle out.
We are providing this guidance based on our understanding of the law as it is written, but the facts could change as we learn more. Please do not make changes to your income or tax position solely based on this blog post, as it is not considered to be tax planning advice.
Make sure to consult your tax professional if you have specific questions about your situation.