The Child Tax Credit (CTC) and Earned Income Tax Credit (EITC) are two of the most valuable tax benefits for American families and low-to-moderate-income earners. These credits can reduce tax liability or even provide a refund, helping taxpayers keep more of their hard-earned money.
In this guide, we’ll cover who qualifies for these credits, how much you can claim in 2025, and how to apply.
What is the Child Tax Credit (CTC)?
The Child Tax Credit (CTC) is a federal tax credit designed to provide financial relief to families raising children.
✔ Key Features of the Child Tax Credit (2025):
✅ Maximum Credit Amount: Up to $2,000 per qualifying child
✅ Refundable Portion: Up to $1,700 per child (as the Additional Child Tax Credit)
✅ Age Limit: Child must be under 17 by the end of 2024
✅ Income Phase-Out: Credit amount decreases for higher earners
📌 Who Qualifies for the Child Tax Credit?
To qualify, both the child and the taxpayer (parent/guardian) must meet specific requirements:
1️⃣ Child Eligibility Requirements:
✔ Age: Child must be under 17 at the end of the tax year.
✔ Relationship: Must be your biological, adopted, stepchild, foster child, sibling, half-sibling, or grandchild.
✔ Residency: Child must have lived with you for more than half the year.
✔ Financial Support: Child cannot have provided more than half of their own financial support.
✔ Citizenship: Child must have a valid Social Security Number (SSN).
2️⃣ Income Limits for the Child Tax Credit
The full $2,000 credit per child is available only if your income falls below these thresholds:
| Filing Status | Income Limit for Full Credit | Credit Begins to Phase Out |
|---|---|---|
| Single / Head of Household | $75,000 or less | Begins phasing out at $200,000 |
| Married Filing Jointly | $150,000 or less | Begins phasing out at $400,000 |
If your income exceeds these limits, the credit gradually decreases by $50 for every $1,000 over the threshold.
📌 Example: If a single filer earns $210,000, they would not qualify for the Child Tax Credit.
What is the Earned Income Tax Credit (EITC)?
The Earned Income Tax Credit (EITC) is a refundable tax credit that benefits low-to-moderate-income workers, helping reduce their tax burden or even providing a tax refund.
✔ Key Features of the EITC (2025):
✅ Maximum Credit Amount: Up to $7,830 for families with three or more children
✅ Refundable: If your credit exceeds your tax liability, you receive the remaining amount as a refund
✅ Work Requirement: You must have earned income from employment or self-employment
📌 Who Qualifies for the Earned Income Tax Credit?
To qualify, you must meet both income limits and other eligibility requirements:
1️⃣ Income Limits for EITC (2025 Tax Year)
Your adjusted gross income (AGI) must be below these limits to claim the credit:
| Filing Status | No Children | 1 Child | 2 Children | 3+ Children |
|---|---|---|---|---|
| Single / Head of Household | $18,591 | $49,084 | $55,768 | $59,899 |
| Married Filing Jointly | $25,511 | $56,004 | $62,688 | $66,819 |
2️⃣ Maximum Credit Amounts for EITC (2025):
| Number of Children | Maximum EITC Credit |
|---|---|
| No Children | Up to $632 |
| 1 Child | Up to $4,213 |
| 2 Children | Up to $6,960 |
| 3 or More Children | Up to $7,830 |
📌 Other EITC Qualification Requirements:
✔ Earned Income Requirement: You must have earned wages, salaries, or self-employment income.
✔ Investment Income Limit: You cannot earn more than $11,600 in investment income.
✔ Citizenship & Residency: You must be a U.S. citizen or resident alien.
✔ Social Security Number (SSN) Requirement: You (and your qualifying children) must have an SSN.
📌 Important: If you’re married but file separately, you CANNOT claim the EITC.
How to Claim the Child Tax Credit & EITC
Filing for the CTC and EITC is straightforward, but you must file a tax return—even if you don’t owe taxes—to receive these credits.
✔ Steps to Claim Your Credits
1️⃣ Gather Required Documents
- W-2s & 1099s (Proof of earned income)
- Social Security Numbers (For you and qualifying children)
- Proof of Residency (School records, medical records, lease agreements)
2️⃣ Use IRS Tax Forms
- Form 1040: General tax return form
- Schedule 8812: To claim the Child Tax Credit
- Schedule EIC: To claim the Earned Income Tax Credit
3️⃣ File Your Taxes
- Free Options: Use the IRS Free File program if your income is under $73,000.
- Paid Software: TurboTax, H&R Block, or a CPA.
- Tax Preparation Assistance: If eligible, use Volunteer Income Tax Assistance (VITA) for free help.
📌 Tip: The IRS does not issue EITC refunds before mid-February to prevent fraud. If you claim the EITC or CTC, expect your refund in late February or early March.
Child Tax Credit vs. Earned Income Tax Credit: Key Differences
| Feature | Child Tax Credit (CTC) | Earned Income Tax Credit (EITC) |
|---|---|---|
| Who Qualifies? | Parents/guardians with children under 17 | Low-to-moderate-income workers (with or without children) |
| Maximum Credit | $2,000 per child | $7,830 (for 3+ children) |
| Refundable? | Partially ($1,700 max) | Fully refundable |
| Income Limits? | Yes, based on $200K/$400K phase-out | Yes, varies by filing status |
| SSN Required? | Yes, for both parent & child | Yes, for both taxpayer & child |
Are You Eligible for the Child Tax Credit or EITC?
The Child Tax Credit and Earned Income Tax Credit can significantly reduce your tax burden and increase your refund.
✔ If you have children under 17, the CTC can provide up to $2,000 per child.
✔ If you’re a low-to-moderate-income worker, the EITC can give you up to $7,830.
✔ File a tax return to claim your credit—even if you don’t owe taxes!
📌 Need help filing? Visit the IRS website or consult a tax professional.
Don’t Leave Money on the Table! Read This Next 👇.
🔗 Click here to read: Tax Deadline 2025: Everything You Need to Know to File on Time
🔗 Click here to read: Maximize Your Tax Refund: Last-Minute Filing Tips for 2025
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