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Dependents and Child Tax Credit and Benefits in 2025

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Despite the recent tax reform removing the dependency exemption, opportunities remain to maximize your tax refund by leveraging tax benefits related to dependents. Such tax benefits and child tax credit in 2025 have the potential to lessen or completely eliminate your tax obligations greatly.

Certain types of tax credits mentioned are classified as refundable, indicating that you are eligible to receive a refund regardless of whether you have any tax liability to offset.

Exploring the tax advantages associated with having dependents is a complex but crucial task. At tax time, rest assured that the adept team at PriorTax will guide you through the process. our PriorTax dedicated tax professionals will inquire about your situation and identify the tax benefits you qualify for based on your responses.

Child Tax Credit in 2025

If you meet the criteria, you could qualify for the Child Tax Credit, a beneficial tax credit for your dependent children. Unlike a tax deduction, this credit directly lowers your tax bill by the exact amount.

In the tax year 2024, when you submit your 2025 tax return, families may be eligible for a Child Tax Credit of up to $2,000 per child aged below 17.

In order to qualify for the entire tax credit, tax paying individuals must have a modified adjusted gross income of $400,000 or less if they file jointly as a married couple, and $200,000 or less for other filing statuses.

Child Tax Credit in 2025

Child and Dependent Care Credit in 2025

If you are responsible for childcare expenses, there is a tax credit opportunity you could be eligible for during tax season. If you are employed or in the process of seeking employment, and you incur childcare costs for your dependent under 13 years old (with no age limit if they are disabled), you are eligible to claim the Child and Dependent Care tax Credit.

Explorable options for tax credits on childcare include expenses from nursery school, private kindergarten, after-school programs, daycare, and seasonal day camps like summer and winter programs. This specific credit offers a direct reduction in your tax liability corresponding to the amount spent on childcare, and it is classified as a nonrefundable credit.

In the fiscal year 2024, individuals can claim expenses of up to $3,000 for one qualifying tax filing person and $6,000 for two or more qualifying individuals. The credit amount is determined by a percentage of expenses, with a maximum credit of $1,050 for one individual or $2,100 for multiple individuals. However, this credit is scaled down for individuals earning over $15,000.

Other Dependent Credit in 2025

If you are not eligible for the Child Tax Credit and have a dependent child over 17 or are providing for a friend or family member, you can potentially claim the Other Dependent Credit, which offers up to $500 per qualifying individual.

Commencing a gradual decline once your adjusted gross income surpasses $200,000 (or $400,000 for those filing jointly), the tax credit becomes inactive for tax year 2024, showing nonrefundable characteristics.

Earned Income Tax Credit (EITC) in 2025

If your income falls below a specific tax threshold, you may be eligible for a unique tax credit. This credit is determined by factors such as your income level, tax filing status, and the number of qualifying dependents you have.

In tax year 2024, individuals may be eligible for a refundable tax credit can be based on the number of children they have. The amount of this tax credit can vary, ranging from a maximum of $7,830 for those with three or more children to $632 for those without children. A distinguishing feature of the Earned Income Tax Credit is that it is refundable, meaning that if the tax credit exceeds the total amount of taxes owed, the excess about can be refunded to the taxpayer.

In the past year, whatever financial decisions you’ve made, the committed tax experts at PriorTax are here to ensure they significantly impact your tax returns. Whether you prefer handling your taxes independently or entrusting them to a PriorTax specialist, rest assured that we are tax dedicated to maximizing your tax refund and securing every dollar you are entitled to.


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