Navigating tax season can be complex, especially when you’re trying to understand what benefits are available to you as a parent. Two key tax credits that significantly impact families are the Child Tax Credit (CTC) and the Earned Income Tax Credit (EITC). While the details for 2025 are yet to be finalized, understanding how these credits work in general, and how they’ve evolved in recent years, can help you plan effectively.
Understanding the Earned Income Tax Credit (EITC)
The Earned Income Tax Credit (EITC) is a refundable tax credit designed to help low- to moderate-income individuals and families. The amount of the credit depends on your income, filing status, and the number of qualifying children you have. To claim the EITC, you must have what qualifies as earned income and meet certain adjusted gross income (AGI) and credit limits.
What Qualifies as Earned Income?
Earned income includes taxable income and wages you get from working for someone else, yourself, or from a business or farm you own.
Examples of Earned Income:
- Wages, salary, or tips (Box 1 of Form W-2)
- Income from gig economy work (e.g., driving for ride-sharing services, selling goods online, freelance work)
- Self-employment income (owning a business or farm, being a minister, or a statutory employee)
- Union strike benefits
- Certain disability benefits received before reaching minimum retirement age
- Nontaxable Combat Pay (Box 12 of Form W-2 with code Q)
What is NOT Considered Earned Income:
- Pay received while incarcerated
- Interest and dividends
- Pensions or annuities
- Social Security benefits
- Unemployment benefits
- Alimony
- Child support
EITC Amounts for Recent Years
While we await the specific figures for 2025, looking at previous years gives us a good indication of how the EITC is structured. Here’s a breakdown of the maximum AGI, investment income, and credit amounts for the past few tax years:
Tax Year 2024
| Children Claimed | Filing Status (Single, Head of Household, Married Filing Separately, Widowed) | Filing Status (Married Filing Jointly) |
|---|---|---|
| Zero | $18,591 | $25,511 |
| One | $49,084 | $56,004 |
| Two | $55,768 | $62,688 |
| Three | $59,899 | $66,819 |
- Investment income limit: $11,600 or less
- Maximum Credit:
- No qualifying children: $632
- 1 qualifying child: $4,213
- 2 qualifying children: $6,960
- 3 or more qualifying children: $7,830
Tax Year 2023
| Children Claimed | Filing Status (Single, Head of Household, Married Filing Separately, Widowed) | Filing Status (Married Filing Jointly) |
|---|---|---|
| Zero | $17,640 | $24,210 |
| One | $46,560 | $53,120 |
| Two | $52,918 | $59,478 |
| Three | $56,838 | $63,398 |
- Investment income limit: $11,000 or less
- Maximum Credit:
- No qualifying children: $600
- 1 qualifying child: $3,995
- 2 qualifying children: $6,604
- 3 or more qualifying children: $7,430
Tax Year 2022
| Children Claimed | Filing Status (Single, Head of Household, Married Filing Separately, Widowed) | Filing Status (Married Filing Jointly) |
|---|---|---|
| Zero | $16,480 | $22,610 |
| One | $43,492 | $49,622 |
| Two | $49,399 | $55,529 |
| Three | $53,057 | $59,187 |
- Investment income limit: $10,300 or less
- Maximum Credit:
- No qualifying children: $560
- 1 qualifying child: $3,733
- 2 qualifying children: $6,164
- 3 or more qualifying children: $6,935
Tax Year 2021
| Children Claimed | Filing Status (Single, Head of Household, Married Filing Separately, Widowed) | Filing Status (Married Filing Jointly) |
|---|---|---|
| Zero | $21,430 | $27,380 |
| One | $42,158 | $48,108 |
| Two | $47,915 | $53,865 |
| Three | $51,464 | $57,414 |
- Investment income limit: $10,000 or less
- Maximum Credit:
- No qualifying children: $1,502
- 1 qualifying child: $3,618
- 2 qualifying children: $5,980
- 3 or more qualifying children: $6,728
Tax Year 2020
| Children Claimed | Filing Status (Single, Head of Household, Widowed) | Filing Status (Married Filing Jointly) |
|---|---|---|
| Zero | $15,820 | $21,710 |
| One | $41,756 | $47,646 |
| Two | $47,440 | $53,330 |
| Three | $50,594 | $56,844 |
- Investment income limit: $3,650 or less
- Maximum Credit:
- No qualifying children: $538
- 1 qualifying child: $3,584
- 2 qualifying children: $5,920
- 3 or more qualifying children: $6,660
The Child Tax Credit (CTC)
The Child Tax Credit (CTC) is another crucial tax benefit for families. Unlike the EITC, the CTC focuses specifically on providing tax relief to families with qualifying children. The amount of the CTC can vary depending on the child’s age and family income.
Key Aspects of the Child Tax Credit
- Qualifying Child: Generally, a qualifying child must be under age 17 at the end of the tax year, be related to you, and meet certain residency requirements.
- Credit Amount: The maximum credit amount can change from year to year based on legislation. For example, the American Rescue Plan Act of 2021 temporarily increased the CTC.
- Refundability: A portion of the CTC is often refundable, meaning you can receive it as a refund even if you don’t owe any taxes.
Child Tax Credit Changes
The Child Tax Credit has seen several changes in recent years, particularly due to various economic relief measures. It’s important to stay updated on the latest changes to understand how they affect your tax situation.
What to Expect for 2025
Predicting the exact figures for the “How Much Do You Get Per Child On Taxes 2025” question is challenging, as tax laws can change. However, here are a few key points to keep in mind:
- Stay Informed: Monitor official sources like the IRS website for updates on tax laws and credit amounts for the 2025 tax year.
- Income Limits: Keep an eye on the AGI and investment income limits for both the EITC and CTC, as these can affect your eligibility.
- Qualifying Child Rules: Ensure you understand the rules for qualifying children to maximize the credits you can claim.
- Consult a Professional: If you’re unsure about your eligibility or how to claim these credits, consider consulting a tax professional.
Conclusion
Tax credits like the EITC and CTC are vital resources for families. While the specific amounts for 2025 are yet to be determined, understanding the general principles and recent trends can help you plan effectively and take advantage of the benefits you’re entitled to. Always refer to the latest IRS guidelines and consider seeking professional advice to ensure you’re making the most of these valuable tax credits.
