It’s official. The United States government has confirmed the provisions of the Child Tax Credit (CTC) for the 2025 tax season, which began on January 27 and will be available until April 15, the deadline for taxpayers to file their tax returns for the fiscal year. This benefit is designed to ease the financial burden on families with dependent children, with an amount of USD 2,000 per qualifying child, of which up to USD 1,500 is refundable if the final amount exceeds the taxpayer’s tax liability.
Having children is not cheap, that’s for sure. For this reason, many families are already calculating how they can claim deductions on their tax returns to the Internal Revenue Service (IRS), with the aim of reducing expenses and optimizing tax benefits. Therefore, the Child Tax Credit is seen as a fundamental tool for reducing the costs of minors, which will mean economic relief has been key for many families, especially in states with high living costs.
Child Tax Credit
The importance of this credit stems from its direct impact on households with children under 17 years of age, who pose great financial challenges for families. In this sense, according to the Center for Fiscal Policies, the average cost of raising a child until the age of 17 amounts to more than USD 233,000, excluding higher education.
However, not all families are entitled to access this credit and have their application accepted for processing by the Administration. The Internal Revenue Service states that to be eligible, children must be under 17 years of age at the end of the 2024 tax year, present a valid Social Security number and have resided with the taxpayer for more than half of the year. In addition, they must be citizens, residents or nationals of the United States, according to official IRS guidelines.
Claiming the Child Tax Credit
In accordance with current tax legislation, taxpayers are required to file Form 1040 or 1040-SR to claim the Child Tax Credit, including full information on qualifying dependents. This process, therefore, ensures a more equitable distribution of tax benefits and facilitates verification of eligibility.
This credit seeks to mitigate the economic burden that the education of minor children entails for millions of households. Therefore, this aid is also intended to cover expenses for childcare, food and hygiene, among other issues related to possible scenarios of vulnerability and economic suffocation. In addition, the focus should also be placed on inflation and the rising cost of products in the shopping basket, which further complicate the purchasing power of these families.
This reality is accentuated in states with the highest standards of living. Thus, in places like California, where the cost of living is considerably high, the impact of the Child Tax Credit is notable. Thus, a report by the Institute for Economic Policy pointed out that households with annual incomes of less than $50,000 spend more than 30% of their income on child-rearing costs, highlighting the importance of this benefit.
