Child Tax Credits: Guide to Filing Claims with the IRS

Families with children can reduce their federal tax bill through tax credits. However, each credit has different rules, amounts, and documentation requirements. The main programs are the Child Tax Credit (CTC), the Child and Dependent Care Credit (CDCTC), and the Earned Income Tax Credit (EITC).

The CTC offers flexible support for family expenses. The CDCTC helps recover part of child care costs related to work or job search. The EITC supplements income for workers with low to moderate wages. A family may qualify for more than one credit.

Who Can Claim the Child Tax Credit?

For the 2025 tax year, the CTC offers up to $2,200 per qualifying child. Up to $1,700 can be refundable. The refundable portion is known as the Additional Child Tax Credit. It can produce a refund even if the family owes no federal taxes.

The child must be under 17 years old at the end of the tax year. The child must also be a U.S. citizen, national, or tax resident. Additionally, the child must have lived with the taxpayer for more than half the year. Exceptions exist for temporary absences due to studies or medical care.

The taxpayer must have a valid Social Security number according to current rules. An ITIN does not automatically substitute for this requirement for the CTC. Families must verify information from the W-2 form and tax returns. An error in the Social Security number can delay the refund.

How Does the Child Care Credit Work?

The CDCTC helps with expenses paid to care for a child or dependent. The expense must enable the person to work or seek employment. The family can claim up to $3,000 in expenses for one child. For two or more children, the limit can reach $6,000.

The federal credit is generally non-refundable. That means it can reduce taxes, but it does not always generate an additional payment. The IRS explains that this credit applies to care expenses while the person works or seeks employment. The person must provide the name, address, and tax identification number of the care provider. The provider can be a daycare facility, a caregiver, or an authorized organization. Informal payments without records may not be sufficient.

Parents must keep receipts, contracts, and bank statements. They must also record the dates and purpose of the care. The CDCTC does not usually cover overnight camps. Nor does it cover expenses unrelated to work or job search.