Good news for parents in 2025! The IRS will be sending out direct deposits of up to $1,500 per child as part of the Additional Child Tax Credit (ACTC). If you have qualifying dependents, you may be eligible for this much-needed financial boost. But how do you qualify, and when will you get your money? Here’s everything you need to know.
What is the Child Tax Credit (CTC) and ACTC?
The Child Tax Credit (CTC) is a federal program designed to help families by reducing their tax burden. The standard CTC offers a maximum of $2,000 per qualifying child, but not all of it is refundable. This means that if your tax bill is lower than your credit amount, you may not receive the full benefit.
That’s where the Additional Child Tax Credit (ACTC) comes in. The ACTC is a refundable portion of the CTC, meaning that even if you don’t owe taxes, you could still receive a cash refund of up to $1,700 per child for the 2024 and 2025 tax years.
Who Qualifies for the $1,500 ACTC Payment?
To receive the ACTC, you must meet the following IRS eligibility requirements:
Your child must be under 17 at the end of the tax year.
The child must be your dependent – biological child, stepchild, foster child, sibling, or grandchild.
They must have lived with you for more than half of the year.
You must have earned income of at least $2,500 to claim the ACTC.
Your income must be below IRS limits – the CTC starts to phase out for individuals earning over $200,000 ($400,000 for married couples filing jointly).
If you meet these requirements, you’re on track to receive the ACTC refund in 2025!
How Much Will You Get?
The amount of ACTC you receive depends on your income. The refundable portion is calculated as 15% of your earned income above $2,500.
For example:
- If your earned income is $30,000:
- $30,000 – $2,500 = $27,500
- $27,500 × 15% = $4,125
Since the ACTC is capped at $1,700 per child, that’s the maximum refund you can receive for each qualifying dependent.
How to Claim Your $1,500 CTC Payment
Filing for the ACTC is simple if you follow these steps:
File Your 2024 Tax Return – The ACTC can only be claimed when you file your federal tax return for the 2024 tax year.
Fill Out Schedule 8812 – This IRS form calculates how much refundable credit you’re eligible for.
Opt for Direct Deposit – Choosing direct deposit ensures you receive your refund faster than a mailed check.
When Will the IRS Send ACTC Payments?
The IRS tax season for 2024 returns opens in late January 2025. If you file electronically and choose direct deposit, you can expect to receive your refund within 21 days.
However, due to federal fraud prevention rules, the IRS cannot issue refunds for ACTC or the Earned Income Tax Credit (EITC) before mid-February. Most families will receive their payments by early to mid-March 2025.
Final Takeaway
If you qualify for the Additional Child Tax Credit, this $1,500+ payment could be a big help in 2025. To ensure you receive your money without delays, file your tax return early, choose direct deposit, and double-check your eligibility.
For the latest updates, visit IRS.gov or consult a tax professional to maximize your refund!
