Child Tax Credit (CTC)
The Child Tax Credit provides up to $2,000 per qualifying child under age 17. The credit phases out at $200,000 AGI (single) and $400,000 (MFJ). The refundable portion (Additional Child Tax Credit/ACTC) is up to $1,700. The child must have a valid Social Security number.
Exam Tip
CTC = $2,000/child under 17. SSN required (not ITIN). Refundable ACTC up to $1,700. Phase-out: $200K single, $400K MFJ. Due diligence penalty = $560.
What is the Child Tax Credit?
The CTC reduces tax liability dollar-for-dollar for each qualifying child. It has both non-refundable and refundable components.
2025 CTC Requirements
| Requirement | Details |
|---|---|
| Age | Under 17 at end of tax year |
| Relationship | Son, daughter, stepchild, foster child, sibling, or descendant |
| Residency | Lived with taxpayer 50%+ of year |
| Support | Child did not provide over 50% of own support |
| SSN | Must have valid SSN (not ITIN) |
| Citizenship | Must be US citizen, national, or resident alien |
Credit Amounts and Phase-Outs
| Component | Amount |
|---|---|
| Maximum CTC | $2,000 per child |
| Refundable portion (ACTC) | Up to $1,700 |
| Phase-out (single) | Begins at $200,000 AGI |
| Phase-out (MFJ) | Begins at $400,000 AGI |
| Phase-out rate | $50 per $1,000 over threshold |
| Other dependents credit | $500 (non-refundable) |
Exam Alert
CTC = $2,000/child under 17 with SSN. ACTC refundable up to $1,700. Phase-out starts at $200K/$400K. Due diligence requirements apply (Form 8867) -- $560 penalty per failure. The $500 Other Dependents Credit is for dependents who don't qualify for the full CTC.
Study This Term In
Buy on Amazon
Take courses on Udemy
Study resources on AchievableRelated Terms
Dependent
A dependent is a person who meets the qualifying child or qualifying relative tests and can be claimed on another taxpayer's return. Claiming a dependent provides eligibility for various credits, deductions, and favorable filing status.
Earned Income Tax Credit (EITC)
The Earned Income Tax Credit (EITC/EIC) is a refundable tax credit for low-to-moderate income workers. The maximum credit for 2025 is $7,830 with 3+ qualifying children. Taxpayers must have earned income, a valid SSN, and investment income below $11,600.
Due Diligence
Due diligence is the investigation period in a real estate transaction during which buyers thoroughly examine the property, review documents, and verify all aspects of the purchase before finalizing the deal.
Your AI study companion · 10 free interactions a day
Stay Updated
Get free exam tips and study guides delivered to your inbox.