Selected parents can soon receive free money through a specific program.
The direct payment opportunity is offered every year to Americans with children, as long as they meet certain criteria.
2
2
It comes as part of the Child Tax Credit (CTC) from the Internal Revenue Service (IRS).
Parents who claim their child is dependent on their taxes and that child meets certain qualifications can get a deduction of up to $2,000 in 2025, according to the IRS website.
It is important to note that the CTC fee is non-refundable and is only a reduction and not a refund.
This means that if the available CTC is greater than what the taxpayer owes, it can only be reduced to the $0 owed, and the unused portion is not returned, according to Intuit TurboTax.
Eligibility
However, it's still free money — available to taxpayers as long as all eight requirements are met for the child.
First, they must be claimed as dependents on the parents' tax form.
They must also be under 17 years old at the end of the 2024 tax year.
The dependent must also be a son, daughter, stepchild, qualified custodial child, brother, sister, half-brother, half-sister, half-brother, half-sister, niece, nephew, or grandchild of the taxpayer(s).
Additionally, the dependent must not have provided more than half of their financial support for the 2024 tax year.
The dependent must be a U.S. citizen, national, or resident alien.
They must also not file a joint return for the 2024 tax year.
Finally, the dependent must have an employable Social Security number issued before the 2024 tax return due date.
Parents should also be aware that the $2,000 CTC can decrease if their total income exceeds $200,000.
For married couples filing jointly that would exceed $400,000.
Eligibility requirements for the child tax credit
An eligible child must:
- Be under 17 years of age at the end of the tax year.
- Be your son, daughter, stepchild, eligible foster child, brother, sister, half-brother, half-sister, half-brother, half-sister, or a descendant of one of these (e.g. , grandchild, niece or nephew).
- Not providing more than half of his own support for the tax year.
- I lived with you for more than half the tax year.
- He claims to be dependent on your return.
- Not filing a joint return for the year (or filing only the joint return to claim a refund of withheld taxes or estimated taxes).
- Be a US citizen, US national, or US resident alien.
- You must have an employable Social Security number issued before the due date of your tax return (including extensions).
Credit: IRS
More money
Some parents can also qualify for the Additional Child Tax Credit (ACTC), which is a refund of up to $1,700 of the $2,000 CTC after the amount due is reduced to zero on their file.
Form 1040 when filing taxes this year includes a CTC worksheet.
Those who qualify after filling out the worksheet will be automatically directed to fill out Schedule 8812 and can claim the ACTC.
More information about the CTC and ACTC can be found on the IRS website.
Some Americans could also get up to $1,400 as the IRS sends out $2.4 billion in new stimulus checks.
One US state is also sending $500 refunds to some residents to break inflation.
