Tax season is here, and millions of parents are wondering whether claiming the child tax credit will affect the timing of their refund. With Tax Day now less than two weeks away for most filers, it is understandable to ask: If you have not filed yet, should you wait? And if you have already filed, when will your money arrive?

There is no reason to delay filing just because you have dependents. The child tax credit is one of the most valuable credits available to families, and it often results in a larger refund. But there is a nuance. If you claim the refundable portion of the credit, known as the additional child tax credit, the IRS may hold your refund for a short period. The good news is that by this point in tax season, that waiting period is already over for most people.

How much is the child tax credit worth?

For tax year 2024, the child tax credit lets you reduce your federal income tax bill by up to $2,000 for each dependent child who was under age 17 on December 31, 2024. The credit is designed to help families with the costs of raising children. It is available only to taxpayers who claim the child as a dependent on their federal return.

The full $2,000 credit is available to single filers with modified adjusted gross income under $200,000 and married couples filing jointly with income under $400,000. Above those thresholds, the credit begins to phase out, or gradually decrease, by $50 for every $1,000 of additional income. High-income families may therefore receive a smaller credit or no credit at all.

What is the additional child tax credit?

The child tax credit has two parts. The first part is nonrefundable, which means it can reduce your tax liability to zero but cannot generate a refund beyond that. The second part is refundable and is officially called the additional child tax credit. If the nonrefundable credit covers all the tax you owe and there is leftover credit amount, you can receive up to $1,700 of that leftover as a refund per child for tax year 2024.

For example, suppose you owe $500 in federal income tax but are eligible for a $2,000 child tax credit. The nonrefundable portion eliminates your $500 tax bill. The remaining $1,500 of the credit can be paid to you as a refund through the additional child tax credit, as long as you meet the earned income requirements. If you have no tax liability, you may also be able to claim the full $1,700 refundable amount per qualifying child provided your earned income is high enough.

The additional child tax credit is often what delays a refund. To prevent fraudulent claims, federal law requires the IRS to hold refunds that involve the additional child tax credit or the earned income tax credit until mid-February. This gives the IRS time to verify income and dependency information.

Why does the IRS delay some child tax credit refunds?

The delay is not random. It stems from the Protecting Americans from Tax Hikes, or PATH, Act, which was signed into law in 2015. Under that law, the IRS cannot issue refunds claiming the earned income tax credit or the additional child tax credit before February 15. The delay was designed to help the agency detect fraudulent refund claims and reduce the chance that stolen identities or false income figures are used to obtain large refunds.

February 15 in 2025 falls on a Saturday, so the IRS was not able to issue payments on that exact date. As a result, refunds for early filers who claimed these credits were scheduled to be released starting the following week. The IRS says that most taxpayers who file online, choose direct deposit, and claim the earned income tax credit or the additional child tax credit should receive their refund by March 3, 2025.

Because that date has already passed, parents who filed by the end of February should not need to worry about an additional credit-related delay this season. If you file later, after the February holding period, your refund should follow the normal processing timeline. The IRS typically issues most refunds within 21 days of accepting an electronically filed return, although paper returns can take much longer.

Do I qualify for the child tax credit?

To claim the child tax credit, you must meet several requirements. The child must be your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of these, such as a grandchild. The child must be under 17 at the end of the tax year, be claimed as your dependent, and have lived with you for more than half the year. The child must not have provided more than half of their own financial support, and they must have a valid Social Security number.

There is also a residency requirement. The child's main home must be in the United States for more than half the year. If the child is a resident of Canada or Mexico, a different set of rules may apply. For most parents, the easiest way to determine eligibility is to fill out IRS Form 8812, which is attached to your tax return and calculates both the nonrefundable and refundable portions of the credit.

How the child tax credit could change next year

The current $2,000 per child amount was set by the Tax Cuts and Jobs Act of 2017. That law temporarily raised the credit from $1,000 to $2,000, and it also increased the refundable portion and introduced the $200,000 and $400,000 income thresholds. These provisions are not permanent. They are scheduled to expire at the end of 2025.

If Congress does not act before then, the credit will revert to the permanent law amount of $1,000 per qualifying child, and the additional child tax credit will also be significantly reduced. The current income thresholds are scheduled to return to previous levels, which means more families could see their credit phased out at lower incomes.

Several lawmakers have proposed extending or expanding the child tax credit in recent years. In 2021, a temporary expansion briefly increased the credit to $3,600 per child under age six and $3,000 per child ages six through seventeen, and it made the credit fully refundable. That expanded version ended in December 2021, and the current rules returned for the 2022 tax year. The fate of the credit after 2025 depends on future legislation, so families should expect potential changes when they file their 2025 taxes next year.

What about state child tax credits?

Some states now offer their own child tax credits, separate from the federal one. These credits vary widely in amount and eligibility. Some are fully refundable, while others can only reduce state tax owed. A few states have even created credits that mirror the federal rules but use different income limits. If you live in one of those states, you may receive a state refund in addition to your federal refund, and the timing may differ.

The IRS does not control state tax refunds. State revenue departments process their own tax returns and issue their own payments. If you are expecting both a federal and state refund, you may receive them on different days. It is also important to remember that the child tax credit is separate from the dependent exemption, which was suspended by the Tax Cuts and Jobs Act through 2025.

How to reduce the risk of a delayed refund

• File electronically: The IRS processes e-filed returns faster and spots errors more easily than paper returns.
• Choose direct deposit: Refunds sent electronically arrive sooner than paper checks and eliminate mailing delays.
• Double-check names and Social Security numbers: A mistaken number on a dependent can hold the entire return.
• Make sure income matches documents: Check W-2s and 1099s before submitting.
• Use IRS Free File if your income qualifies: It calculates the credit accurately.

Even with a hold for additional child tax credit claims, a clean return is less likely to require further review. If the IRS needs more information, you will receive a notice asking for verification. Responding quickly can prevent a long wait.

Families who are still preparing their returns can also use IRS tools to track a refund after the return has been filed. The IRS offers an online tracking portal called Where's My Refund?, along with a mobile app. To use it, you need your Social Security number, filing status, and the exact amount of your refund as shown on your return. The tool is updated once a day, usually overnight, so checking too frequently will not speed up the process.

Ultimately, claiming the child tax credit is still a valuable way to reduce your tax burden. The possibility of a short delay applies mainly to the refundable portion of the credit. If you have already filed and are owed a refund that includes the additional child tax credit, you should expect your money to arrive in early March at the latest. For those who have not yet filed, waiting is unnecessary. The delayed-refund rule, for this season, no longer presents a meaningful obstacle. All that remains is to file accurately and keep an eye on your bank account for the IRS deposit.

Source: CNET News