How to Claim Child Tax Credit in 2025

For U.S. citizens and expats with children, the 2025 Child Tax Credit offers valuable financial relief. While the rules have shifted over the years, this credit remains one of the most significant benefits for families. Whether you live in the U.S. or abroad, understanding eligibility, filing requirements, and how to maximize your claim is key.

What Is the Child Tax Credit?

The Child Tax Credit (CTC) is designed to help families offset the costs of raising children. For the 2025 tax year, eligible parents may receive up to $2,000 per qualifying child under age 17, with part of it refundable as the Additional Child Tax Credit (ACTC).

Key Rules for 2025 Child Tax Credit

1. Age Requirement – The child must be under 17 at the end of 2025.

2. Relationship Test – Applies to biological children, stepchildren, foster children, siblings, or grandchildren.

3. Residency – The child must live with you for at least half of the year.

4. Support Test – The child cannot provide more than half of their own financial support.

5. Social Security Number – Each qualifying child must have a valid SSN by the filing deadline.
   

Income Phaseouts

The credit begins to phase out at higher income levels:

• $400,000 for married filing jointly

• $200,000 for single filers
  

Above these thresholds, the credit reduces by $50 for every $1,000 of income.

Claiming the 2025 Child Tax Credit as an Expat

For Americans abroad, the rules still apply—but there are some extra considerations:

• Foreign Earned Income Exclusion (FEIE) – If you exclude too much income under FEIE, you may not have enough taxable income to benefit from the credit.

• Foreign Tax Credit (FTC) – Helps balance U.S. tax liability, but can also affect credit eligibility.

• Filing Requirement – Expats must file Form 1040 with Schedule 8812 to claim the credit.

• Refundable Portion – The Additional Child Tax Credit (up to $1,600 in 2025) may still be available to expats, depending on earned income.
  

Example for Expats

An American couple living in Australia with two kids under 17 earns $85,000 combined income. They file a U.S. return, claim the 2025 child tax credit, and reduce their U.S. tax bill by $4,000. If their U.S. tax liability is less than the credit, they may receive part of it as a refund.

Common Mistakes When Claiming the Child Tax Credit

1. Incorrect SSN – Without a valid Social Security number, the IRS denies the credit.

2. Using FEIE incorrectly – Over-excluding income can disqualify you.

3. Misreporting residency – Children must live with you for at least six months.

4. Overlooking refundable credit – Many expats miss out on the Additional Child Tax Credit refund.
   

FAQs

How much is the 2025 child tax credit worth?

Up to $2,000 per qualifying child under 17, with up to $1,600 refundable.

Can expats claim the child tax credit?

Yes, but income exclusions and credits may affect eligibility.

Do adopted children qualify?

Yes, adopted children with valid SSNs are eligible.

What forms do I need?

Form 1040 and Schedule 8812 are required.

Can I claim if my child lives abroad?

Yes, as long as they meet residency, support, and SSN requirements.

Conclusion

The 2025 child tax credit remains a powerful tool for families to reduce tax burdens and potentially receive refunds. For U.S. expats, extra care is needed to navigate FEIE and FTC rules. With the right planning, you can maximize your claim and ensure your family receives the financial support they’re entitled to.

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