There's no reason to wait to file your taxes, especially if you're expecting to get money back from the IRS in the form of a tax refund. That said, if you're a parent claiming the child tax credit this year, there are certain circumstances under which your refund will get delayed. With little more than a week left before Tax Day, is that something you should still worry about? The short answer is no, provided you file electronically and choose direct deposit. But understanding the nuances of the credit can help you avoid confusion and ensure you receive every dollar you're owed in a timely manner.

The child tax credit allows parents to lower the amount they owe in taxes each year, depending on how many eligible children they can claim as dependents. Its purpose is to help manage the costs of raising a family. Under the current rules, the credit can both decrease the amount you might owe in taxes down to $0 and increase the amount that you might get back as a refund. However, it's that latter possibility, known as a "refundable tax credit," that might result in your not getting your full tax refund right away.

How much money could I get from the child tax credit?

Under the current federal-level credit, you can receive up to $2,000 per dependent child under age 17 from the child tax credit. The child tax credit is nonrefundable, meaning you can't receive that $2,000 if it's more than the taxes that you owe. In other words, if your tax liability is only $1,500, the credit can only reduce your bill to zero, and the remaining $500 is lost unless you qualify for the additional child tax credit.

However, if you claim the child tax credit and have no tax liability, you can get $1,700 per child back in a separate tax break known as the additional child tax credit. That refundable portion is designed to help lower-income families who may not earn enough to owe income tax but still need support for raising children. If that happens, you'll run into a slight potential delay because the IRS is required by law to hold those refunds until the middle of February as a check on fraud.

The history and temporary nature of the credit

The child tax credit was introduced in 1997 as a $400 per child credit, part of the Taxpayer Relief Act signed by President Bill Clinton. Over the years, it has been expanded multiple times. The Tax Cuts and Jobs Act of 2017, signed by President Donald Trump, doubled the credit from $1,000 to $2,000 per child, increased the income thresholds at which the credit phases out, and made the credit more accessible to middle-income families. That expansion is temporary and is set to expire at the end of 2025. If Congress does not pass another extension by then, the credit will revert to its permanent-law value of $1,000 per dependent child.

The temporary nature of the expansion has been a point of political debate. In 2021, the American Rescue Plan temporarily expanded the credit even further for a single year, raising it to $3,600 for children under six and $3,000 for children ages six to seventeen, and making it fully refundable. That expansion also included advance monthly payments that began in July 2021. However, the expansion expired at the end of 2021, and the credit returned to the $2,000 level for 2022 and subsequent years.

Eligibility requirements for claiming the child tax credit

To claim the child tax credit, your dependent must meet several requirements:

• The child must be under age 17 at the end of the tax year.
• The child must have a valid Social Security number issued before the due date of your tax return.
• The child must be your son, daughter, stepchild, foster child, sibling, or a descendant of any of these.
• The child must have lived with you for more than half of the tax year.
• The child must not provide more than half of their own financial support.
• The child must be claimed as a dependent on your tax return.

Additionally, the credit begins to phase out once your modified adjusted gross income exceeds $200,000 for single filers or $400,000 for married couples filing jointly. This phase-out is not adjusted for inflation, meaning more families may become ineligible over time unless the law is changed.

When will I get my refund if I claim the additional child tax credit?

If you are claiming the additional child tax credit, the IRS is required by law to not release the money for your tax refund until the middle of February. This waiting period is intended to help the IRS verify the legitimacy of claims and prevent fraud, particularly for credits that are susceptible to identity theft and bogus filings. The IRS says that if you file online with direct deposit and claim the earned income tax credit or additional child tax credit, you should receive your tax refund by March 3, 2025. So at this point in tax season, if you still need to file your return you shouldn't have any delay to worry about as far as the child tax credit goes.

None of that would have applied to you if you only opted for the standard child tax credit, the nonrefundable one that merely lowers your tax due. In that case, you wouldn't be owed any extra money due to the credit and so wouldn't be subject to the rules about checking for fraud. The only situation that triggers the delay is when you're claiming the refundable portion, which the IRS treats with extra scrutiny.

How to claim the child tax credit

Claiming the child tax credit is straightforward if you're using tax preparation software or a professional tax preparer. You'll need to complete Schedule 8812, which calculates both the nonrefundable and refundable portions of the credit. This form asks for each child's name, Social Security number, and date of birth. The IRS cross-references this information with its records, so any inconsistency can flag your return for manual review and cause a delay.

To avoid mistakes, be sure to double-check your children's Social Security numbers. A simple typo can result in a rejected return or a delayed refund. Also, ensure that you're using the correct filing status and that your income figures match your W-2s and other tax documents. E-filing is the safest way to reduce errors and speed up processing.

Potential future changes under the new administration

With the expiration of the temporary expansion approaching, lawmakers are debating the future of the child tax credit. President Trump has signed into law the "One Big Beautiful Bill," which makes sweeping changes to the tax code. While the full details are still being analyzed, the legislation may include provisions that affect the child tax credit, such as extending the $2,000 amount or modifying the refundability rules. Some lawmakers have proposed making the credit fully refundable again, while others argue for tightening eligibility to focus on families with earned income. Taxpayers should stay informed about these changes, as they could have a significant impact on their tax planning for 2026 and beyond.

Why the delay exists and what to do if your refund is late

The delay for refunds involving the additional child tax credit stems from the Protecting Americans from Tax Hikes (PATH) Act of 2015, which requires the IRS to hold refunds for any return claiming the earned income tax credit or the additional child tax credit until February 15. This rule was implemented to give the IRS time to match information from employers and verify that the credits are legitimate. The IRS can also use this time to detect fraudulent returns filed with stolen Social Security numbers.

If you filed in early January and your refund hasn't arrived by the end of February, you can use the IRS's "Where's My Refund?" tool to check its status. The tool is updated once a day, typically overnight. You'll need your Social Security number, filing status, and exact refund amount. If the tool shows your refund is still being processed after several weeks, you may need to contact the IRS directly, but be prepared for long wait times and limited phone assistance during peak tax season.

For many families, the child tax credit is a critical source of financial support, helping with everything from school supplies to childcare expenses. While the potential for a delay can be stressful, the IRS's fraud prevention measures are a sign that the system is working to protect taxpayer money. By filing accurately and electronically, you can minimize the risk of errors and ensure your refund arrives as quickly as possible.

For more to prepare yourself for tax season, it's wise to review all available credits and deductions, including home energy tax credits, which can offer significant savings for homeowners who make qualifying energy-efficient improvements. Staying organized and informed is the best way to navigate the complexities of the tax code and maximize your refund.

Source: CNET News