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Common tax mistakes that could cost you the Additional Child Tax Credit in 2025

Millions of Americans rely on the Child Tax Credit to reduce their tax liability each year. But simple filing mistakes could cause delays—or even complete loss—of your 2025 refund, especially the refundable portion known as the Additional Child Tax Credit (ACTC).

What is the Additional Child Tax Credit?

The Child Tax Credit offers up to $2,000 per child under 17. If your tax liability is lower than the credit amount, you may qualify for the ACTC, which is refundable up to $1,700 per child. This is especially important for lower-income families who may owe little or no federal tax.

To claim the full benefit, your income must be below $200,000 if filing individually or $400,000 if filing jointly. Beyond those thresholds, the credit begins to phase out.

IRS warns of common filing errors

The IRS will not issue ACTC refunds before mid-February. Even then, delays are common if your return contains mistakes. Erin Collins, the National Taxpayer Advocate, has reported that many low-income families miss out on thousands of dollars simply because they don’t meet the filing requirements properly.

In 2022 alone, more than 18 million taxpayers filed for the ACTC. Here’s how to avoid losing your refund in 2025.

Make sure your child qualifies

To claim the ACTC, your child must meet the following criteria:

  • Be under age 17 at the end of the tax year
  • Be your dependent and live with you for more than half the year
  • Have a valid Social Security Number
  • Not file their own return claiming personal exemption

Using tax software or working with a certified preparer can help ensure eligibility is correctly determined.

Don’t file without a Social Security Number

One of the most common mistakes is filing before obtaining your child’s Social Security Number. If you have a newborn or recently adopted child, wait until the number is issued—typically within one to six weeks. Filing without it will result in rejection of the credit.

If you’re waiting on documentation, you can file for an extension. But remember, any taxes owed must still be paid by the April deadline to avoid penalties.

File early—but not too early

Even though the IRS begins accepting returns in January, ACTC refunds are legally held until mid-February. To avoid errors, wait until all required forms and documentation are available before filing. Early filing with incomplete or estimated information can trigger review flags.

The bottom line

Missing out on the ACTC refund could cost families up to $1,700 per child. Avoiding errors starts with understanding eligibility and filing requirements. When in doubt, seek help from a certified tax professional or use reliable tax preparation software.

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