The 2023 child tax credit is up to $2,000 per child under age 17

For the 2023 tax year, the child tax credit allows you to claim up to $2,000 for each child under age 17 at the end of 2023. This amount has stayed the same since 2018. The credit reduces the federal income tax you owe dollar-for-dollar, meaning a $2,000 credit cuts your tax bill by $2,000.

Not all of the credit is refundable. You can claim up to $1,600 as a refundable credit, which means you can receive that amount even if you owe no tax. The remaining $400 per child is nonrefundable, so you can only use it to reduce tax you actually owe. If you have three children, for example, you could claim up to $4,800 total, with $4,800 refundable (three children × $1,600) and the rest nonrefundable.

Your income determines whether you can claim the full amount. The credit begins to reduce at $400,000 of modified adjusted gross income for married couples filing jointly, and $200,000 for single filers and heads of household. For each $1,000 (or fraction of $1,000) over these thresholds, the credit reduces by $50.

Key Takeaways

  • The maximum child tax credit for 2023 is $2,000 per child under age 17, with $1,600 refundable and $400 nonrefundable.
  • Your income affects how much credit you can claim: the credit phases out starting at $400,000 for married couples filing jointly and $200,000 for single filers.
  • You must have a valid Social Security number for each child to claim the credit on your 2023 tax return.
  • If you received advance child tax credit payments in 2023, you will reconcile those payments against your actual credit when you file your 2023 return.

Who can claim the $2,000 credit

To claim the child tax credit, the child must be your son, daughter, stepchild, foster child, sibling, or a descendant of any of these (such as a grandchild or niece). The child must have lived with you for more than half of 2023, be a U.S. citizen, national, or resident alien, and have a valid Social Security number. The child must also be under age 17 at the end of 2023.

You must also meet income limits. If your modified adjusted gross income exceeds $400,000 (married filing jointly) or $200,000 (single or head of household), the credit phases out. You cannot claim the credit if your income is too high, though the exact cutoff depends on how many children you have and how far over the threshold your income goes.

Only one person can claim each child. If parents are divorced or separated, the parent with custody for the greater part of the year typically claims the credit, unless they sign a form agreeing to let the other parent claim it.

How the credit reduces if your income is too high

The child tax credit does not disappear entirely when you exceed the income threshold. Instead, it reduces by $50 for each $1,000 (or any part of $1,000) that your modified adjusted gross income exceeds the limit for your filing status.

For example, if you are married filing jointly with two children and your modified adjusted gross income is $401,500, you are $1,500 over the $400,000 threshold. That counts as two full or partial $1,000 increments, so your credit reduces by $100 (2 × $50). Your maximum credit would be $4,000 (two children × $2,000), reduced to $3,900.

If your income is $400,100, you are only $100 over the threshold, which still counts as one partial $1,000 increment. Your credit reduces by $50. The IRS rounds up any amount over a full $1,000, so even $1 over a threshold costs you $50 in credit.

Refundable versus nonrefundable portions

The child tax credit has two parts: $1,600 per child is refundable, and $400 per child is nonrefundable. This distinction matters if you owe little or no federal income tax.

The refundable portion ($1,600) means you can receive money back even if you owe zero tax. If you have one child and owe $800 in tax, the refundable credit covers that $800, and you receive the remaining $800 as a refund. The nonrefundable portion ($400) can only reduce tax you owe. If you owe no tax, you cannot use the nonrefundable $400.

The refundable portion is also called the additional child tax credit or refundable child tax credit. You claim both parts on the same line of your tax return (Form 1040, line 19 for the 2023 tax year), but the IRS software automatically separates them when calculating your refund or tax owed.

Advance payments you may have received in 2023

In 2023, some families received advance child tax credit payments from the IRS. These were monthly payments sent to your bank account or mailed as checks, usually between $100 and $300 per child depending on your income. The IRS sent these advances based on your 2022 tax return or information you provided through their online portal.

When you file your 2023 tax return, you must account for any advance payments you received. The IRS will send you a letter (Form 6419) showing the total amount of advance credits paid to you in 2023. You report this amount on your 2023 return, and the IRS compares it to the credit you are actually may have access to to claim based on your 2023 income and household.

If you received more in advance payments than you are may have access to to claim, you may owe back some or all of that money when you file. If you received less than your full credit, you claim the difference on your return. This is called reconciliation, and it happens automatically when you file.

How to claim the credit on your 2023 tax return

You claim the child tax credit on Form 1040 (U.S. Individual Income Tax Return). On the 2023 form, line 19 is where you enter the total credit for all may have access to children. You do not need to attach a separate form for each child, but you must list each child's name and Social Security number on Schedule 8812 if you are claiming the refundable portion.

If you use tax software, the program will ask you questions about each child (name, date of birth, Social Security number, relationship to you, and months lived with you). The software calculates the credit automatically and places it on the correct line. If you file by paper, you fill in the child information directly on Form 1040 or on the attached schedule.

You must have a valid Social Security number for each child. If a child does not have a number, you cannot claim the credit for that child. If you are unsure whether a number is valid, you can verify it through the Social Security Administration before filing.

What changed from 2022 to 2023

The maximum credit amount did not change from 2022 to 2023. It remained $2,000 per child, with $1,600 refundable and $400 nonrefundable. The income thresholds also stayed the same: $400,000 for married couples filing jointly and $200,000 for single filers and heads of household.

The main difference between 2022 and 2023 was the advance payment schedule. In 2021 and 2022, the IRS sent advance payments monthly from July through December. In 2023, advance payments were not automatically sent; instead, families had to request them through the IRS portal or claim the full credit on their 2023 tax return.

The credit is set to expire after 2025 unless Congress extends it. Starting in 2026, the maximum credit would drop to $1,000 per child and the refundable portion would disappear entirely, unless new legislation changes this.

Frequently Asked Questions

Can I claim the child tax credit if my child has no Social Security number?

No. Your child must have a valid Social Security number to claim the credit. If your child was born in 2023 and does not yet have a number, you can explore for one through the Social Security Administration. You can still file your return without the number and amend it later once you receive it, or you can delay filing until the number arrives.

What if my income is exactly at the threshold, like $400,000 for married filing jointly?

If your income is exactly at the threshold, you can claim the full credit with no reduction. The credit only begins to phase out once your income exceeds the threshold. At $400,001, your credit reduces by $50.

Do I have to pay back advance payments if my 2023 income was higher than my 2022 income?

It depends on how much higher your income was and how many children you have. If your 2023 income rose above the phase-out threshold, you may owe back some or all of the advance payments. The IRS calculates this when you file your return. However, there are limits on how much you must repay based on your filing status and income level.

Can I claim the credit for a child who turned 17 during 2023?

No. The child must be under age 17 at the end of 2023 (December 31, 2023). If your child turned 17 at any point during 2023, you cannot claim the child tax credit for that child on your 2023 return. You may be able to claim other credits, such as the credit for other dependents, which is worth $500.

What is the difference between the child tax credit and the child and dependent care credit?

The child tax credit is $2,000 per child under 17 and does not depend on childcare expenses. The child and dependent care credit is for money you paid to care for a child or dependent so you could work, and it is worth up to $3,000 of expenses. These are separate credits, and you can claim both if you meet the requirements for each.