Understanding the Child Tax Credit: What You Need to Know for 2024, 2025, and Beyond

The Child Tax Credit (CTC) has long provided financial relief to families with eligible children. Whether you are new to claiming the credit or have been utilizing it for years, staying informed about the rules and potential changes is essential. With key provisions of the Tax Cuts and Jobs Act (TCJA) set to expire at the end of 2025, here’s what you should know about the CTC for 2024, 2025, and beyond.

Current CTC Structure

Since the TCJA took effect in 2018, the CTC increased from $1,000 to $2,000 per qualifying child. For the 2024 and 2025 tax years, the CTC remains at $2,000 per child under age 17.

The provisions within the TCJA also expanded eligibility by raising the income phaseout thresholds. For 2024 and 2025, the phaseout thresholds will remain at:

• $200,000 for single filers

• $400,000 for married couples filing jointly

Refundable Portion of the Credit

A portion of the CTC is refundable, meaning you can receive a tax refund even if you owe no taxes. For both 2024 and 2025, up to $1,700 per qualifying child is refundable.

Credit for Other Dependents

A separate, nonrefundable credit of up to $500 is available for dependents who do not qualify for the CTC. Eligible dependents can be:

• Individuals of any age who qualify as dependents

• Dependent parents or other qualifying relatives you support

• Dependents living with you who are not related

What Happens After 2025?

Unless Congress acts to extend or modify the current TCJA provisions, the CTC will revert to pre-TCJA rules in 2026, meaning:

• The maximum credit per qualifying child will drop back to $1,000

• The phaseout thresholds will decrease to approximately $75,000 for single filers and $110,000 for married couples filing jointly

If these changes take effect, many taxpayers may see their CTC reduced by half, leading to a higher federal tax liability in 2026.

Legislative Proposals and Future Changes

In recent years, several proposals have been introduced regarding the CTC’s future. During the presidential campaign, Vice President J.D. Vance expressed support for expanding the credit. While specific details remain uncertain, indications suggest President Trump also favors extending or increasing the current $2,000 credit beyond 2025.

Many Congressional Republicans advocate for maintaining or permanently implementing the $2,000 credit. However, in a proposal from House Budget Committee, Republicans suggests requiring both parents and children to have Social Security numbers (SSNs) to claim the credit—potentially reducing the number of eligible families.

Because these proposals have not yet been enacted, taxpayers should monitor legislative changes closely.

How to Claim the CTC

To claim the CTC, you must provide your child’s SSN on your tax return, issued before the filing deadline (including extensions). If a qualifying child lacks an SSN, you may still claim the $500 credit for other dependents.

For dependents who do not qualify for the CTC, you must provide a taxpayer identification number, which may be an Individual Taxpayer Identification Number (ITIN), Adoption Taxpayer Identification Number (ATIN), or SSN.

Stay Informed

The CTC remains a vital tax benefit for millions of families. While the credit remains at $2,000 per qualifying child for 2024 and 2025, its future beyond 2025 is uncertain.

Our office is here to keep you updated on any legislative changes. Feel free to contact us with any questions about how these rules impact your tax situation.