Child tax credit: how much it is, who qualifies and how it phases out

How much is the child tax credit

The child tax credit (CTC) is a federal credit of up to $2,200 per qualifying child for tax years 2025 and 2026. It reduces your income tax dollar for dollar, and part of it can be paid to you as a refund even when you owe no tax.

The 2025 law (Public Law 119-21) set the amount at $2,200 for 2025 and tied it to inflation after that. For 2026, the inflation adjustment left the figure at $2,200, according to Rev. Proc. 2025-32. The 2027 amount has not been published yet.

Most people filing in the 2027 season need the 2026 row. Our child tax credit 2026 page walks through that year with worked returns, and the child tax credit 2027 page tracks the next announcement.

Who qualifies: the child tax credit rules for a qualifying child

A child counts only if every test below is met. Failing one test does not always leave you with nothing: a dependent who misses the CTC may still bring the $500 credit for other dependents.

The age test catches the most families

The child must be under 17 on December 31. A child who turns 17 on any day of 2026, even December 31, does not qualify for the 2026 credit. Many parents lose the credit in the year of a 17th birthday without expecting it.

Social Security number rules

The child needs a Social Security number that is valid for employment and issued by the due date of the return, including extensions. A child with only an ITIN or an ATIN cannot bring the CTC. For 2026 returns the person claiming the credit also needs a valid SSN; on a joint return one spouse's SSN is enough if the other spouse has an SSN or ITIN. Details and edge cases are on our child tax credit SSN rules page.

Separated and divorced parents

Usually the parent the child lived with for more nights claims the credit. The other parent can claim it only if the custodial parent signs a release on Form 8332 and it is attached to the return. Both parents cannot claim the same child in the same year.

Is the child tax credit refundable

Partly. The CTC first cancels your income tax. If the credit is larger than your tax, the leftover can come back as the additional child tax credit (ACTC), capped at $1,700 per child for 2026.

The refundable amount is the smallest of three numbers: the unused credit, $1,700 times the number of qualifying children, and 15% of your earned income above $2,500. With no earned income, or earned income of $2,500 or less, none of it is refundable. Families with three or more children can use an alternative method based on Social Security and Medicare tax withheld, which sometimes gives a larger refund.

How the rows work: at $20,000 the 2026 head of household standard deduction of $24,150 wipes out taxable income, so the refund is 15% of $17,500. At $30,000, taxable income is $5,850 and tax is $585; the other $3,815 is refundable but capped at $3,400 for two children. At $60,000 the tax of $3,948 absorbs most of the credit. These examples assume wages only and no other credits. The additional child tax credit page covers the formula line by line.

Does the child tax credit phase out

Yes, but only at higher incomes. The credit starts to shrink when modified adjusted gross income (MAGI) passes $200,000, or $400,000 on a joint return. It falls by $50 for every $1,000 (or part of $1,000) above the threshold.

These thresholds are fixed dollar amounts in the tax code and are not adjusted for inflation. A married couple with two children and MAGI of $420,000 loses $1,000 and keeps $3,400. The child tax credit income limit page shows where the credit reaches zero for one to four children.

How to claim the CTC on your return

1. List each child in the Dependents section of Form 1040 with name, SSN and relationship, and check the child tax credit box.
2. Complete Part I of Schedule 8812 (Credits for Qualifying Children and Other Dependents). It multiplies qualifying children by $2,200 and other dependents by $500, then applies the income phaseout.
3. Carry the nonrefundable amount to Form 1040, line 19.
4. If some credit is left over, complete Part II of Schedule 8812 using your earned income, and enter the refundable amount on Form 1040, line 28.
5. Keep records showing the child lived with you more than half the year, such as school or medical records, in case the IRS asks.

If your credit came out lower than you expected, the usual causes are the age test, a missing or invalid SSN, low earned income or the income phaseout. Our list of reasons the child tax credit is reduced goes through each one.

Getting the child tax credit amount through your paycheck

There are no monthly CTC payments. The only advance payments were in 2021 under the American Rescue Plan. What you can do is claim the credit through lower withholding.

Step 3 of the 2026 Form W-4 asks you to multiply qualifying children under 17 by $2,200 and other dependents by $500, if your total income will be $200,000 or less ($400,000 or less joint). Your employer then withholds less tax each payday, so you receive the credit over the year instead of in one refund. If you overstate it, you may owe at filing time.

Related credits for families

• Credit for other dependents: up to $500 for a dependent who fails the CTC tests, such as a 17-year-old or a parent you support. Not refundable. See the credit for other dependents.
• Child and dependent care credit: a separate credit for daycare and similar costs while you work, with a top rate of 50% for 2026. See the child and dependent care credit.
• Adoption credit: up to $17,670 per child for 2026, with up to $5,120 refundable. See the adoption credit.
• Earned income credit: a refundable credit for lower earners that you can claim in the same year as the CTC.

These credits stack. A family can claim the CTC, the dependent care credit and the earned income credit on the same return, provided each credit's own rules are met.