What the Child Tax Credit is and how much it's worth

The Child Tax Credit is a federal tax reduction you can claim on your income tax return if you have children under a certain age. When you claim it, the IRS reduces the amount of tax you owe — or increases your refund if you're owed money back. The credit is worth up to $2,000 per child for the 2024 tax year, though the exact amount depends on your income and how many children you have.

The credit works differently from a deduction. A deduction lowers the income the IRS counts; a credit directly reduces your tax bill dollar for dollar. This makes the Child Tax Credit more valuable than most deductions. If the credit is larger than the tax you owe, you may receive the difference as a refund — but only up to a limit set by law each year.

The credit has changed several times over the past decade. The amount, income limits, and refund rules shift based on federal law. Before you file, check the IRS website or a tax professional to confirm the current rules for the year you're filing.

Key Takeaways

  • The Child Tax Credit reduces your federal tax bill by up to $2,000 per child under age 17, but the exact amount depends on your income.
  • You must have a valid Social Security number for each child you claim, and the child must live with you for more than half the year.
  • Your income determines whether you can claim the full credit, a reduced credit, or no credit at all — the limits change each year.
  • Part of the credit may be refundable, meaning you can receive money back even if you owe no tax, though the refundable amount is capped.
  • You claim the credit on your federal tax return using Form 1040 and Schedule 8812, or through tax software that walks you through the questions.

Income limits and how they affect the credit amount

The Child Tax Credit begins to shrink once your income passes a certain threshold. For the 2024 tax year, that threshold is $400,000 for married couples filing jointly and $200,000 for single filers, though these numbers change year to year. For every $1,000 of income above the threshold, the credit reduces by $50.

This means if you earn $410,000 as a married couple filing jointly, your credit per child drops by $500 (because you're $10,000 over the limit). If your income is high enough, the credit could shrink to zero, though this happens only at very high income levels.

Your income for this purpose is your modified adjusted gross income, or MAGI — a figure that includes most types of income you report on your tax return. If you're unsure whether you're over the limit, a tax professional or tax software can calculate it for you based on your specific situation.

Who can claim the credit and what the IRS requires

You can claim the Child Tax Credit for each child who meets all of these conditions: the child is under age 17 at the end of the tax year, the child is your son, daughter, stepchild, foster child, sibling, or a descendant of any of these (such as a grandchild or niece), the child lived with you for more than half the year, you paid for more than half the child's support during the year, and the child is a U.S. citizen, national, or resident alien with a valid Social Security number.

The Social Security number requirement is strict. The IRS will not allow the credit without a valid number for each child. If a child doesn't have a number yet, you can request one from the Social Security Administration before you file your tax return.

You must also claim the child as a dependent on your return. If another person — such as a grandparent or ex-spouse — claims the child as a dependent, only that person can claim the credit. If you and another person both claim the same child, the IRS will disallow the credit for one of you and may assess penalties.

The refundable portion and how much you can get back

Part of the Child Tax Credit is refundable, which means you can receive it as a refund even if you owe no federal income tax. The refundable portion is called the Additional Child Tax Credit or ACTC. For 2024, up to $1,700 per child can be refundable, though this amount changes year to year.

To receive the refundable portion, you must have earned income — money from wages, self-employment, or certain other sources. If you have no earned income, you cannot claim the refundable part, though you may still claim the non-refundable portion if you owe tax.

The refundable amount is also limited to 15 percent of your earned income above $2,500. This means if you earned $10,000, your refundable credit is capped at 15 percent of $7,500, or $1,125 per child — even if the full refundable amount is higher. Tax software or a tax professional can calculate this limit for your specific income.

How to claim the credit on your tax return

You claim the Child Tax Credit on your federal Form 1040 (the main individual income tax return) along with Schedule 8812, which is the worksheet for calculating the credit and the refundable portion. If you use tax software, the program will ask you questions about each child and calculate the credit automatically — you won't fill out the forms by hand.

To file, you'll need the child's full legal name, date of birth, and Social Security number for each child you're claiming. You'll also need to confirm that the child lived with you for more than half the year and that you paid for more than half their support. Keep records of major expenses like housing, food, childcare, and medical costs in case the IRS asks.

You can file your return on paper or electronically. Most people file electronically because it's faster and the IRS processes it more quickly. If you file on paper, mail your return to the IRS address for your state, which you can find on the IRS website.

Advance payments and monthly deposits (when available)

In some years, the IRS has sent advance payments of the Child Tax Credit directly to families each month, rather than waiting until tax time. These payments were based on the credit you were expected to claim on your return. If advance payments were sent, you would have received them automatically if you filed a tax return the previous year or registered with the IRS.

When advance payments are available, you must reconcile them on your tax return — meaning you report how much you received and adjust your credit claim based on your actual income and family situation. If you received more in advance than you were may have access to to, you may owe money back when you file. If you received less, you claim the difference as a credit on your return.

Advance payment programs are not permanent and depend on Congress. Check the IRS website each year to see whether advance payments are being made for the current tax year.

Frequently Asked Questions

Can I claim the credit if the child doesn't live with me full-time?

The child must live with you for more than half the year. If custody is shared and the child lives with you exactly half the year, you cannot claim the credit. If the child lives with you 183 days or more out of 365, you meet the requirement. Keep a calendar or records showing when the child was in your home.

What if I'm divorced and both parents want to claim the credit?

Only one parent can claim the credit for each child. Usually this is the parent with primary custody. If you have a custody agreement, check whether it specifies who claims the credit. If it doesn't, the parent who has the child for the greater number of nights during the year can claim it — unless you both agree in writing that the other parent will claim it instead.

Do I need to file a tax return to get the refundable portion?

Yes, you must file a federal income tax return to claim any part of the Child Tax Credit, including the refundable portion. Even if you owe no tax, filing allows you to receive the refundable credit as a refund. If you have very low income, you may not be required to file, but filing is worth doing to claim this credit.

What happens if I claim the credit and the IRS finds out I don't meet the requirements?

The IRS may disallow the credit, require you to repay it, and assess penalties and interest. If the error was unintentional, penalties may be reduced. If the IRS suspects fraud, the penalties are steeper. Keep records of your child's residency and support for at least three years after you file.

Can I claim the credit for a child who is not a U.S. citizen?

The child must be a U.S. citizen, national, or resident alien. A resident alien is someone with a green card or certain visa status. The child must also have a valid Social Security number. If the child does not meet these requirements, you cannot claim the credit for that child.