The 2025 tax season has begun today, 27 Jan 2025, the taxpayers must have started filing their tax returns for the 2024 tax year to complete their tax responsibility. But the taxpayers should know the federal government offers some tax credits that reduce their tax bills as it offers them tax breaks.
One such tax credit is the Additional Child Tax Credit (ACTC), a refundable portion of the Child Tax credit that eligible citizens can claim and get the credit amount with their tax refund. The US taxpayers wondering about the Additional Child Tax Credit (ACTC) 2025 can learn everything about the tax credit here.
Additional Child Tax Credit (ACTC) 2025
The Additional Child Tax credit is a refundable credit of the child tax credit which increases the tax refund for the taxpayers when they qualify for the credit. The taxpayers have to claim the tax credit with their tax returns to receive the credit.
The government started the Child Tax Credit and ACTC to relieve the financial stress from the taxpayers as the cost of raising the child is high, and it can create financial stress for the parents/ guardians. Hence, the ACTC credits allow the claimants to lower their taxes, offset the costs, and get back money in their pocket.
The IRS grants the $2000 child tax credit to eligible taxpayers, whereas under the ACTC, the taxpayers can expect the $1700 credit amount for each child who qualifies for the credit. The IRS announces the credit amount based on inflation every year. Hence, the refundable credit was increased from $1600 to $1700 this year.
Who can claim the Additional Child Tax Credit (ACTC) 2025?
The US citizens who wish to claim the Additional Child Tax Credit (ACTC) 2025 for their dependent child should check the child eligibility conditions for the credit to check their eligibility:
- Your child should be dependent on you and age under 17 at the end of the 2024 tax year;
- Your child should be living with you for more than six months in the 2024 tax year;
- Your child should be claimed as dependent on your 2024 tax year tax return;
- You should now provide financial support for his/her own support in the 2024 tax year;
- Your child must be a US citizen/ US national/ or a US resident alien;
- Your child must have a valid Social Security Number for employment and it must be issued before the due date of the 2024 tax year tax return;
- Your child must not have filed any joint tax return for withheld taxes or estimated taxes for the 2024 tax year.
- Your child’s relations with you can be a son, daughter, brother, sister, eligible foster child, step-brother/ sister, half-sister/ brother, or descendants of your family, like grandkid, niece, or nephew, and you are responsible for the child care.
What can affect the Additional Child Tax Credit (ACTC) 2025?
Under the IRS guidelines, the Additional Child Tax Credit refund can be affected due to some factors that every claimant should know, such as:
- The amount of the ACTC refund can reduce the taxpayer’s adjusted gross income by more than $200,000 for individuals and $400,000 for people who file tax returns jointly.
- When you filed the tax returns jointly, and you or your spouse has filed the form 2555 or 2555EZ excluding the foreign earned income would not be allowed to receive the credit from the IRS.
The taxpayers should know that Form 2555 is for foreign-earned income exclusion and for housing deduction or exclusion, and Form 2555EZ is for excluding the foreign-earned income to exclude income of $107,600 from expat taxes.
When can you receive the Additional Child Tax Credit (ACTC) tax refund 2025?
According to the IRS guidelines, the ACTC refund would be processed to the taxpayers who claimed the credits late after 15 Feb 2025 due to the PATH Act limitation. The PATH Act restriction does not allow the IRS to process the refund with credits because the government wanted the agency to take time to process the return with credits and prevent any fraudulent claims.
Thus, the taxpayers who will claim the ACTC with their tax return in 2025 will receive the refund with the credit amount after 15 Feb 2025, when generally, the IRS takes a week or three weeks to process the tax refund. According to the IRS, taxpayers can expect their ACTC tax refund on 27 Feb 2025 or afterward if they have selected direct deposit as their payment method.
The taxpayers who have selected the physical check as their payment method will receive the ACTC tax refund by the first week of March 2025 depending on their local mailing address, hence the IRS urges taxpayers to select the direct deposit as their payment method.
How Can you claim the Additional Child Tax Credit (ACTC) 2025?
Taxpayers planning to claim the ACTC refund with their 2024 tax year tax return due in 2025 can follow the electronic ways to file the tax return. The taxpayers can file through IRS Direct File (if it is available for their area) or they can file the tax return with IRS Free File.
To successfully claim the ACTC, the taxpayers should gather the required documents that can support their ACTC claim and file Schedule 8812 (credits for Qualifying children and other dependents) with their tax form, where they can find the ACTC claims in Part II-A of the form.
The taxpayers who wish to claim the ACTC in this year’s tax season should check the tax information they filled in the tax return to ensure there would be no delay and issue in their tax return processing and receive the tax refund timely.