US citizens with tax liability can file their tax return from January 27, 2025since the IRS will start accepting taxes from that date. Taxpayers should know that the federal government has many credits that allow taxpayers to receive tax relief or the ability to increase their tax refund.
Additional Child Tax Credit is one such tax credit, which is a refundable part of Child Credit. Taxpayers planning to claim the ACTC with their tax return can learn all about this refundable credit here.
Return of the additional tax credit for children in 2025. Tax Administration
The IRS has tax credits that allow taxpayers to save some money and lower their tax bills if they meet certain conditions. The Child Tax Credit and ACTC allow individuals with a dependent child who is eligible for the tax credit to receive a non-refundable credit and a refundable credit.
A refundable credit increases your tax refund even when you owe no tax to the agency, so the IRS encourages citizens to file tax returns even when they have no income to report. The refundable credit is the unused portion of the CTC refund that the IRS defines based on inflation.
The IRS publishes an inflation adjustment for each year based on inflation, so based on the inflation adjustment for tax year 2024, the ACTC refund increases to $1,700 from the previous $1,600. The IRS has kept the ACTC refund the same as for the 2024 tax year for the 2025 tax year, which will be due in 2026.
When can you expect the IRS on the additional tax credit for children in 2025?
The IRS generally sends refunds earlier within 21 days if the tax return is e-filed and taxpayers have chosen the direct deposit payment method. IRS tax refunds are processed based on how you filed, how you paid for your refund, and when the IRS accepted your tax return.
Taxpayers should be aware that tax return processing with ACTC and EITC claims takes longer due to the obligation under the PATH Act. Under the PATH Act, the IRS must wait until February 15th of tax season to process a tax return with ACTC/EITC claims to prevent any fraudulent activity and give the IRS more time to properly review the tax return.
So if you file your tax return earlier this tax season, even then you will receive your tax refund after February 15, 2025. According to the IRS, tax refunds with ACTC/EITC claims will be processed by February 27, 2025 via direct deposit and physical check tax refund will be sent in the first week of March 2025 as it takes time.
Who Can Apply for the IRS Additional Child Tax Credit 2025?
Taxpayers planning to claim ACTC tax credit with their tax return this tax season should check the following eligibility requirements for the child for whom you wish to claim credit:
- The child must be under the age of 17 in the tax year 2024;
- A child related to you may be your son, daughter, brother, half-brother/daughter, eligible foster child, brother, sister, half-brother/sister, half-sister/brother or he/she may be a descendant of your family;
- The child must live with you and you are responsible for taking care of you for at least half of the tax year;
- You must claim the child as a dependent on your tax return and the child should not file a joint return for the tax year;
- The child should not be fending for himself during the tax year;
- The child must be a US citizen/citizen/or resident alien in the US;
- The child must have a social security number that was issued before the 2024 tax year due date and is valid for employment.
What might affect your 2025 Additional Child Tax Credit refund from the IRS?
According to the IRS, the ACTC tax refund may be reduced or affected by certain factors. Taxpayers can check these factors to see what may affect their ACTC tax refund:
- Your adjusted gross income should not exceed $200,000 for individuals and $400,000 for married filers, if this happens your ACTC refund will begin to decrease.
- You will not receive an ACTC refund if you or your partner (who filed a joint return) filed Form 2555 EC or Form 2555 with your tax return. Form 2555 mentions exclusions and deductions for foreign earned income and housing for the tax year, while Form 2555 EZ allows you to exclude $107,600 of your foreign earned or other income;
In addition, taxpayers should ensure that they file their tax return with valid tax information so that they do not have problems when the agency reviews their tax returns and receive their tax refunds in a timely manner.
How can you apply for the IRS Additional Child Tax Credit for 2025?
Taxpayers who wish to apply for ACTC with their tax return can request it with their Form 1040 along with filing Form Schedule 8812. Taxpayers should include information about the dependent child and calculate the ACTC on Form 8812 Schedule Part II-A.
Taxpayers should check every detail before filing a tax return to ensure that the IRS accepts the tax return and processes the tax refund in the applicable payment period. When filing your tax return, you must select direct deposit as your payment method to ensure that you receive the payment directly into your bank account.
With the IRS tax season set to begin in a few days, taxpayers who wish to claim ACTC with their tax return should file it before the deadline to receive up to $1,700 in tax refunds on time.
