Child Tax Credit and Dependents

The child tax credit reduces your tax dollar for dollar, which makes it one of the most valuable items on a family's return. The One Big Beautiful Bill Act set the credit at $2,200 per qualifying child for 2025 and made the larger credit permanent. The rules about who counts as your child, which Social Security numbers are required and how income limits work are strict, and mistakes here are a common reason for IRS letters.

Who is your dependent

A dependent is either a qualifying child or a qualifying relative. A qualifying child must meet five tests: relationship (your child, stepchild, foster child, sibling or a descendant of one of them), age, residency, support and joint return. In general the child must be under 19 at year-end, or under 24 if a full-time student, or any age if permanently and totally disabled. The child must have lived with you more than half the year and must not have provided more than half of their own support.

A qualifying relative is someone who is not anyone's qualifying child, who is related to you or lived with you all year as a household member, whose gross income is under a set limit ($5,200 for 2025 and $5,300 for 2026) and whom you support by more than half. Three further tests apply to every dependent: you cannot be someone else's dependent, a married dependent generally cannot file a joint return, and the dependent must be a U.S. citizen, national or resident alien (or a resident of Canada or Mexico). The IRS summarizes these rules in Publication 501.

The child tax credit

A child qualifies you for the credit if the child is under 17 at the end of the year, is claimed as your dependent, did not provide more than half of their own support, lived with you more than half the year, is a U.S. citizen, national or resident alien, and has the required Social Security number. The maximum is $2,200 per child.

Refundable portion

If the credit is more than your tax, you may receive part of the excess as the additional child tax credit (ACTC). The refundable amount is capped at $1,700 per child for 2025 and 2026, and you need at least $2,500 of earned income. The IRS cannot issue refunds for returns that properly claim the ACTC before mid-February, and that delay applies to the whole refund.

Income limits

The credit is reduced when modified adjusted gross income is above $200,000 for most filers or $400,000 for married couples filing jointly. These thresholds are not adjusted for inflation under current law.

Social Security number rules

This is where many families get caught. For tax year 2025, the child must have an SSN that is valid for employment and was issued before the due date of the return, including extensions. If you file jointly, at least one spouse must have such an SSN, and the other spouse may have an ITIN issued on or before the due date. A child with only an ITIN cannot be used for the child tax credit, but may qualify you for the credit for other dependents. Applying early matters: if a number has not been issued by the due date, you cannot claim the credit on the original or an amended return for that year. See our guide on ITINs for spouses and dependents.

Credit for other dependents

Dependents who do not qualify for the child tax credit, such as a 17-year-old, a college student or a parent you support, may qualify you for a nonrefundable credit of up to $500 each. Starting in 2025, you (or your spouse on a joint return) must have an SSN or ITIN issued on or before the return's due date, and the dependent needs an SSN, ITIN or adoption taxpayer identification number.

Child and dependent care credit

This is a separate credit for work-related care costs. For 2026 it changes: the top rate rises from 35% to 50% of qualifying expenses for lower incomes, then steps down as AGI increases (to as low as 20% at higher incomes), and the expense limits stay at $3,000 for one person and $6,000 for two or more. The employer dependent care assistance exclusion also increases to $7,500 ($3,750 if married filing separately) starting in 2026. These apply to 2026 planning, not 2025 returns.

Example

Example: Priya and Dan file jointly with modified AGI of $120,000 for 2025. They have a 10-year-old and a 17-year-old, all with valid Social Security numbers. The 10-year-old qualifies for the $2,200 child tax credit. The 17-year-old does not (too old for that credit) but qualifies them for a $500 credit for other dependents. Together the credits reduce their tax by up to $2,700, to the extent they have tax to offset.

Divorced or separated parents

Generally, the custodial parent claims the child. The custodial parent can release the claim by signing Form 8332, and the other parent attaches it to their return. A release does not change which parent qualifies for head of household. See filing status.

Illinois

Illinois offers its own child tax credit for tax years 2024 and 2025. For 2025 it equals 40% of the Illinois earned income credit for taxpayers with a child under 12. See the Illinois Department of Revenue page above and our Illinois guide.

How we can help

We can confirm who is your qualifying child under the tests, check that the right Social Security or taxpayer identification numbers are in place before the deadline, and handle IRS letters about credit claims. See individual tax preparation or contact us.

Frequently asked questions

General information only, not tax, legal or accounting advice for your situation. Rules, limits and deadlines change; confirm the current rules with the official source or a qualified professional before you act. Reading this page does not create a professional relationship with CPA Tax Payroll and Accounting Corp.