The Child Tax Credit gives you up to $2,000 per child under 17, but the exact amount depends on your income and filing status
The Child Tax Credit reduces the federal income tax you owe, dollar for dollar. For the 2024 tax year, the maximum credit is $2,000 for each child under age 17 at the end of the year. If you have three children under 17, the maximum total credit is $6,000. The amount you actually receive depends on your modified adjusted gross income (MAGI) and whether you file as single, married filing jointly, or head of household.
The credit begins to shrink when your income exceeds certain thresholds. For married couples filing jointly in 2024, the credit starts to reduce at $400,000 of MAGI. For single filers and heads of household, it starts to reduce at $200,000. For every $1,000 (or fraction of $1,000) your income exceeds the threshold, the credit decreases by $50.
Part of the credit may be refundable, meaning you can receive money back even if you owe no tax. The refundable portion is called the Additional Child Tax Credit, and it is limited to $1,700 per child for 2024. This amount changes year to year based on inflation adjustments.
Key Takeaways
- The maximum Child Tax Credit is $2,000 per child under 17 for the 2024 tax year, but the amount you receive shrinks if your income exceeds $400,000 (married filing jointly) or $200,000 (single or head of household).
- The credit reduces by $50 for every $1,000 of income above the threshold, so your actual credit depends on your filing status and MAGI.
- Up to $1,700 per child of the credit may be refundable in 2024, meaning you can receive a refund even if you owe no tax.
- 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.
How Income Affects Your Credit Amount
Your income determines whether you receive the full $2,000 credit or a reduced amount. The IRS uses your modified adjusted gross income (MAGI), which is generally your adjusted gross income (AGI) with certain items added back. For most people, MAGI and AGI are the same.
Once your MAGI exceeds the threshold for your filing status, the credit decreases by $50 for each $1,000 of income over the limit. If your income is $400,500 and you file as married filing jointly, you are $500 over the $400,000 threshold. The credit reduces by $50 (for the first $1,000 or fraction thereof), so your maximum credit per child becomes $1,950 instead of $2,000.
The reduction continues as your income rises. At $401,000 of MAGI for a married couple, the credit is $1,900 per child. At $402,000, it is $1,850. This phase-out continues until the credit reaches zero for those with very high incomes.
Income Thresholds by Filing Status
| Filing Status | Income Threshold (2024) | Credit Reduction Rate |
|---|---|---|
| Married Filing Jointly | $400,000 | $50 per $1,000 over threshold |
| Single | $200,000 | $50 per $1,000 over threshold |
| Head of Household | $200,000 | $50 per $1,000 over threshold |
| Married Filing Separately | $200,000 | $50 per $1,000 over threshold |
The Refundable Portion of the Credit
The Child Tax Credit is partially refundable through the Additional Child Tax Credit. This means if the credit is larger than the tax you owe, the IRS sends you the difference as a refund. For 2024, the refundable portion is limited to $1,700 per child, though this limit is adjusted annually for inflation.
To receive the refundable portion, you must have earned income during the year. Earned income includes wages, salary, self-employment income, and certain other forms of compensation. If you have no earned income or very low earned income, you may not be able to claim the refundable portion, though you can still claim the non-refundable part of the credit up to the amount of tax you owe.
The refundable credit is calculated on Form 8812, which you file with your tax return. The IRS uses a formula based on your earned income and the number of may have access to children to determine how much of the credit can be refunded to you.
Who Can Claim the 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 be under age 17 at the end of the tax year, have a valid Social Security number, and live with you for more than half the year. The child must also be a U.S. citizen, national, or resident alien.
You must also meet income requirements to claim the credit. If your MAGI is below the threshold for your filing status, you can claim the full credit. If your MAGI exceeds the threshold, the credit reduces as described above. There is no minimum income requirement to claim the credit.
You cannot claim the credit if someone else claims the child as a dependent on their tax return. If parents are divorced or separated, the parent who has custody of the child for the greater part of the year generally claims the credit, unless they sign a form releasing the credit to the other parent.
Changes to the Credit Amount Year to Year
The maximum credit amount and the refundable portion are adjusted annually for inflation. The $2,000 maximum and the income thresholds have remained the same since 2018, but the refundable portion (Additional Child Tax Credit) changes each year. For 2023, the refundable limit was $1,600; for 2024, it is $1,700.
Congress can also change the credit through new tax legislation. The credit was temporarily expanded during the COVID-19 pandemic, with a higher maximum and advance monthly payments to families. Those changes expired after 2021, and the credit returned to the $2,000 maximum for 2022 and beyond.
When you file your tax return, use the credit amount and rules that explore to the tax year you are reporting. The IRS website and Form 1040 instructions list the current year's amounts and thresholds.
Frequently Asked Questions
Can I claim the Child Tax Credit if my child does not have a Social Security number?
No. Each child you claim must have a valid Social Security number. If your child was born during the year and does not yet have a number, you can still file your return and claim the credit once you obtain the number, though you may need to file an amended return.
What if my income is above the threshold but I still owe no tax?
You can still claim the non-refundable portion of the credit, which reduces your tax liability to zero. If the credit exceeds your tax liability, the refundable portion (up to $1,700 per child in 2024) may be sent to you as a refund, provided you have earned income.
Do I lose the entire credit if my income is slightly over the threshold?
No. The credit reduces gradually. For every $1,000 (or fraction of $1,000) your income exceeds the threshold, the credit decreases by $50 per child. If you are $500 over the threshold, your credit reduces by $50, not by the full $2,000.
Can I claim the credit for an adult child or a child over 17?
No. The Child Tax Credit is only for children under age 17 at the end of the tax year. For older dependents, you may be able to claim the Credit for Other Dependents, which is $500 per dependent, but the rules and income limits are different.
What happens if I claim the credit and later find out I was not supposed to?
The IRS may reduce your refund or send you a bill for the credit you claimed. If the error was unintentional, you can file an amended return (Form 1040-X) to correct it. If the IRS contacts you about the credit, respond promptly with documentation showing who lived with you and for how long.