Understanding the Updates for the Child Tax Credit

As a parent, you probably already know the Child Tax Credit is a valuable tax benefit, but you may not have known that the new law prevented the credit from returning to a lower amount.

What It Is

The Child Tax Credit reduces your tax bill because you are supporting a qualifying child. If your child meets the IRS criteria, including age, relationship, residency, and identification requirements, this credit can make a meaningful difference at tax time.

What Is Changing for 2025

Starting with the 2025 tax year:

• The credit increases to $2,200 per qualifying child.

• Up to $1,700 of that amount can be refundable.

• The income phaseout thresholds stay the same:

  • $200,000 for single/head-of-household filers

  • $400,000 for married filing jointly

These changes were made permanent under the One Big Beautiful Bill Act, but will be adjusted for inflation in future years.

A New Requirement

The new law enhanced the Social Security Number (SSN) requirements for both the parent(s) and the child. That means both the taxpayer’s SSN or at least one spouse’s SSN on a joint return, and the qualifying child’s SSN must be included on the tax return. This helps ensure the credit is properly claimed and complies with the new law.

Each week, I share a clear, bite-sized tax insight straight from my continuing education so you can stay informed without sifting through tax changes.

Next week, we share a big change for 1099 reporting.

Thanks for reading,

Brandy Sparkman, EA

I’ll keep learning so you can stay focused on what you do best.

See you next week for another Tax Minute.