Child Tax Credit | Internal Revenue Service

Quick Facts

Credit amount: Up to $2,000 for each qualifying child under age 17 at the end of 2024, with up to $1,600 refundable through the Additional Child Tax Credit (ACTC).
Eligible taxpayers: U.S. citizens and resident aliens who claim dependents meeting the IRS relationship, residency, age, and support tests.
Income limits: The credit begins to phase out when modified adjusted gross income exceeds $200,000 for single filers and $400,000 for married couples filing jointly.
Deadline: File a 2024 federal return by April 15, 2025 (or the extended deadline) to receive the credit.
Official resources: IRS Child Tax Credit portal and Schedule 8812 instructions outlining eligibility, calculations, and documentation requirements.

Program Overview

The Child Tax Credit (CTC) offsets the cost of raising children by reducing federal income tax bills. Families can use it to lower their tax liability dollar-for-dollar and, if their tax is reduced to zero, may receive part of the credit as a refundable payment through the Additional Child Tax Credit. Congress adjusts eligibility rules and amounts periodically, but for tax year 2024 the maximum credit remains $2,000 per child, and up to $1,600 of that amount can be refunded when certain earned income thresholds are met. The credit complements other family-focused supports such as the Earned Income Tax Credit and Child and Dependent Care Credit, helping parents cover essentials like housing, food, and education.

Eligibility Requirements

To claim the CTC for 2024, taxpayers must meet seven tests for each child:

Age test: The child must be under 17 on December 31, 2024.
Relationship test: Children may be biological, adopted, stepchildren, eligible foster children, siblings, or descendants of any of these (e.g., grandchildren, nieces, nephews).
Support test: The child cannot have provided more than half of their own support during the year.
Dependent test: The child must be claimed as a dependent on the taxpayer’s return.
Citizenship test: The child must be a U.S. citizen, U.S. national, or U.S. resident alien with a valid Social Security number issued by the filing deadline.
Residency test: The child must have lived with the taxpayer for more than half of 2024, with exceptions for temporary absences such as school, medical care, or military deployment.
Filing status test: The child cannot file a joint return with a spouse unless the return is filed solely to claim a refund of withheld tax or estimated payments.

Taxpayers themselves must have a valid Social Security number or Individual Taxpayer Identification Number (ITIN) to file a return, but they need an SSN to qualify for refundable portions of the credit. Parents who use an ITIN may claim the nonrefundable portion for qualifying dependents with SSNs, but they cannot receive the Additional Child Tax Credit.

Income Phaseouts and Refundable Portion

The full $2,000 credit is available until modified adjusted gross income (MAGI) exceeds $200,000 for most single, head-of-household, and qualifying surviving spouse filers, or $400,000 for married couples filing jointly. Once MAGI surpasses those thresholds, the credit is reduced by $50 for every $1,000 of additional income. Families with large households should project income early to estimate the potential phaseout impact.

Families with little or no tax liability can unlock the refundable ACTC by filing Schedule 8812. The refundable amount equals 15% of earned income above $2,500, up to $1,600 per child. Alternatively, if a family has three or more qualifying children, the ACTC may be calculated using the “excess Social Security tax” method described in the Schedule 8812 instructions. Refundable credits are paid after the IRS verifies the return; like EITC refunds, ACTC payments are held until mid-February if the return is filed in January.

Calculating the Credit

Schedule 8812 walks filers through a multi-step process:

List qualifying children: Provide names, SSNs, and relationship to confirm eligibility.
Determine the maximum credit: Multiply the number of qualifying children by $2,000.
Apply nonrefundable limitation: Compare total nonrefundable credits against tax liability to determine how much of the $2,000 per child can offset the tax bill.
Compute refundable ACTC: Use Part II of Schedule 8812 to calculate the portion eligible for refund, based on earned income or the alternative formula for families with three or more children.
Transfer results: Enter the nonrefundable CTC on Form 1040, line 19, and the refundable amount on Schedule 8812, line 15, which flows to Form 1040, line 28.

Tax software performs these calculations automatically, but taxpayers should double-check data entry, especially Social Security numbers and earned income amounts. Errors often delay refunds or result in IRS notices.

Interaction with Other Credits

Families frequently combine the CTC with other benefits:

Earned Income Tax Credit: Some families qualify for both credits. The EITC is fully refundable, while the CTC is partially refundable, so the combination can significantly increase refunds.
Credit for Other Dependents: Dependents who do not meet the age or SSN rules for the CTC (such as college students over age 17 or parents supported by the taxpayer) may qualify for a $500 nonrefundable credit.
Child and Dependent Care Credit: This separate credit helps cover childcare expenses so parents can work or look for work. Claiming both requires careful recordkeeping to avoid double-counting expenses.
State tax credits: Many states piggyback on the federal CTC or offer their own family credits; check local rules to maximize savings.

Application and Filing Steps

Gather documentation: Collect Social Security cards, birth certificates, custody agreements, and school or medical records showing residency.
Verify earned income: Ensure W-2s, 1099s, and self-employment records are complete. Household employees should confirm Social Security and Medicare taxes were withheld.
Complete Form 1040 and Schedule 8812: Provide accurate information for each qualifying child and run the credit calculation.
Review the return: Confirm the credit amount, refund, and direct deposit details. Look for data-entry errors such as transposed SSNs.
File electronically with direct deposit: E-filing speeds IRS processing and makes it easier to track refund status via Where’s My Refund?

Documentation Tips and Compliance

The IRS may request proof of residency or relationship when reviewing CTC claims. Maintain:

School records, childcare bills, or medical statements showing the child’s address.
Lease agreements or utility bills listing the taxpayer and child.
Court or agency documents for foster or adopted children.
Support worksheets that demonstrate the child did not provide more than half of their own support.

Tax preparers must meet due diligence requirements when claiming the CTC or ACTC. Paid preparers must complete Form 8867 and retain copies of documents to substantiate eligibility. Failing to follow due diligence rules can lead to penalties and potential disallowance of the credit for the client.

Timeline and Refund Expectations

Although taxpayers can file returns in late January, the IRS typically issues refunds involving the ACTC no earlier than mid-February due to the Protecting Americans from Tax Hikes (PATH) Act. Filers should plan budgets accordingly and avoid relying on refunds for early-year expenses. Using the IRS’s “Get Transcript” tool or online account can help families review prior-year information and reconcile any advance payments received in 2021 (which no longer apply but may still appear on transcripts).

Strategic Guidance

Run projections in the fall: Estimating year-end income helps families adjust withholding or make retirement contributions to stay under phaseout thresholds.
Coordinate with separated or divorced parents: Only one taxpayer can claim a child each year. Review custody agreements and, if needed, use Form 8332 to release the claim to the noncustodial parent.
Check SSNs early: If a child was born late in the year, request a Social Security number promptly so it arrives before the filing deadline.
Beware of scams: The IRS never contacts taxpayers via social media or text to offer the CTC. Use official channels to avoid identity theft.
Plan for college-bound teens: When a child turns 17, the CTC no longer applies, but the Credit for Other Dependents may still reduce taxes.

Frequently Asked Questions

Is the Child Tax Credit fully refundable? No. For 2024, up to $1,600 per qualifying child can be refunded if you have sufficient earned income. The remaining $400 per child is nonrefundable and only offsets tax liability.

Do infants qualify? Yes. As long as a baby was born alive before the end of 2024 and has a Social Security number, parents can claim the credit even if the child lived only a few days.

What happens if I incorrectly claim the credit? The IRS can deny the credit, reduce your refund, and require Form 8862 before you claim it in future years. Intentional disregard may trigger a two-year ban; fraud can lead to a ten-year ban.

Can I claim the credit if I live abroad? U.S. citizens abroad can claim the CTC, but the refundable amount may be limited if they exclude foreign earned income under Section 911. Review Publication 972 or Schedule 8812 instructions for details.

References

Insider Tips to Win Child Tax Credit

Confirm residency tests. Keep school, medical, or childcare records that prove each child lived with you for over half the year.
Maximize refundable amounts. Use Schedule 8812 to calculate the additional credit for lower-income households and ensure earned income thresholds are met.
Update IRS accounts promptly. Report changes in dependents or custody arrangements via your IRS online account to prevent refund holds.