What is the Child Tax Credit
The child tax credit is a federal tax credit worth up to $2,000 per qualifying child under age 17 that directly reduces your tax bill dollar-for-dollar — and up to $1,700 may be refundable through the Additional Child Tax Credit.
The child tax credit is a federal income tax credit available to parents and guardians of qualifying children. For tax year 2025, the credit is worth up to $2,000 per qualifying child under age 17 and directly reduces your federal income tax liability dollar-for-dollar. If the credit exceeds your tax liability, up to $1,700 of the unused amount may be refunded through the Additional Child Tax Credit (ACTC).
Tax credits are more valuable than deductions — a $2,000 credit reduces your tax bill by $2,000, regardless of your tax bracket, while a $2,000 deduction reduces it by only your marginal rate times $2,000.
Qualifying Child Requirements
To count for the child tax credit, the child must:
- Be under 17 years old at the end of the tax year
- Be your son, daughter, stepchild, adopted child, sibling, half-sibling, step-sibling, or a descendant of any of these
- Have lived with you for more than half the tax year
- Not have provided more than half of their own financial support
- Have a valid Social Security number (not just an ITIN)
- Be a U.S. citizen, national, or resident alien
Income Phase-Out Thresholds
The child tax credit begins to phase out for higher-income filers. The credit is reduced by $50 for every $1,000 (or fraction thereof) of income above the threshold:
| Filing Status | Phase-Out Starts |
|---|---|
| Single / Head of Household / Qualifying Widow(er) | $200,000 |
| Married Filing Jointly | $400,000 |
| Married Filing Separately | $200,000 |
For example, a married couple earning $420,000 would see their credit reduced by 20 × $50 = $1,000 per child, leaving $1,000 per child remaining.
The Additional Child Tax Credit (Refundable Portion)
The basic child tax credit is partially refundable through the Additional Child Tax Credit. If your tax liability is less than your total child tax credit, you may receive up to $1,700 per child (2025) as a refund, calculated as 15% of your earned income above $2,500.
This is different from a non-refundable credit, which can only reduce your tax to zero. The ACTC allows qualifying families with low or moderate incomes to receive meaningful cash back.
Credit vs. Dependent Care Credit
The child tax credit is often confused with the Child and Dependent Care Credit, which covers childcare or dependent care expenses that allow you to work or look for work. These are separate credits:
| Child Tax Credit | Dependent Care Credit | |
|---|---|---|
| Age limit | Under 17 | Under 13 |
| Purpose | General credit for having a child | Covers childcare/work-related care expenses |
| Max per child | $2,000 | $3,000 (1 child) / $6,000 (2+ children) |
| Refundable? | Partially (ACTC) | No |
How to Claim the Child Tax Credit
Claim the child tax credit on IRS Form 1040. You'll use Schedule 8812 (Credits for Qualifying Children and Other Dependents) to calculate the credit, especially if you have a complex situation or are claiming the Additional Child Tax Credit.
The credit applies per qualifying child, so a family with three qualifying children could receive up to $6,000 in credits ($18,000 total cap, reduced by any phase-out).
Because the ACTC is a refundable credit, the IRS is required by law to hold refunds claiming it until mid-February, similar to the EITC.