What the Additional Child Tax Credit Is

The Additional Child Tax Credit (ACTC) is a refundable portion of the Child Tax Credit. If your Child Tax Credit is larger than the income tax you owe, the IRS sends you the difference as a refund. This is different from a regular tax credit, which only reduces what you owe — a refundable credit can put money in your pocket even if you owe nothing.

The maximum Additional Child Tax Credit for the 2024 tax year is $1,700 per may have access to child under age 17. The exact amount you receive depends on your earned income and how many children you claim. You claim it on your tax return using IRS Form 1040 and Schedule 8812.

The ACTC exists because families with lower incomes often pay little or no federal income tax, so a regular tax credit would not help them. The refundable portion ensures that working families with children can still receive money back from the government.

Key Takeaways

  • The Additional Child Tax Credit is money the IRS sends you if your Child Tax Credit exceeds the income tax you owe.
  • You must have earned income (wages, self-employment income, or certain other sources) to claim the ACTC — investment income alone does not count.
  • The credit is limited to 15 percent of your earned income above $2,500, or a flat maximum of $1,700 per child, whichever is less.
  • You claim the ACTC on Schedule 8812 when you file your federal tax return; you do not claim it separately or in advance.
  • The child must be a U.S. citizen, national, or resident alien with a valid Social Security number, and must be under age 17 at the end of the tax year.

Earned Income Requirements

To claim the Additional Child Tax Credit, you must have earned income during the tax year. Earned income includes wages from a job, net self-employment income, military housing allowances, and certain other sources. It does not include investment income, rental income, Social Security, unemployment benefits, or child support.

The amount of ACTC you can receive is limited to 15 percent of your earned income that exceeds $2,500. For example, if you earned $20,000 in wages, your earned income above $2,500 is $17,500. Fifteen percent of $17,500 is $2,625. However, the maximum ACTC per child is $1,700, so you would receive $1,700 per may have access to child (up to the $2,625 limit if you have more than one child).

If your earned income is $2,500 or less, you cannot claim the Additional Child Tax Credit, though you may still be able to claim the regular Child Tax Credit if you meet other requirements.

Who Qualifies as a Dependent Child

The child must meet several requirements to count toward your Additional Child Tax Credit. The child must be under age 17 at the end of the tax year, be your son, daughter, stepchild, foster child, sibling, or descendant of any of these (such as a grandchild or niece), and live with you for more than half the tax year.

The child must also be a U.S. citizen, national, or resident alien, and must have a valid Social Security number. You must claim the child as a dependent on your tax return, and no one else can claim the child as a dependent. If you and another parent share custody, only one of you can claim the child each year.

The child's relationship to you and residency are the most common sources of confusion. A child who lives with you only during summers or school breaks may not meet the "more than half the year" test. A child who is not a U.S. citizen or does not have a Social Security number cannot be claimed, even if you provide financial support.

How the Amount Is Calculated

The IRS uses a formula to determine your Additional Child Tax Credit. First, calculate 15 percent of your earned income above $2,500. Then compare that amount to the maximum credit per child ($1,700 for 2024). You receive whichever is smaller.

If you have more than one may have access to child, you can receive up to $1,700 for each child, as long as the total does not exceed 15 percent of your earned income above $2,500. For example, if you earned $30,000 and have two may have access to children, 15 percent of $27,500 (your income above $2,500) is $4,125. You could receive up to $3,400 ($1,700 per child), which is less than $4,125, so you would receive the full $3,400.

The calculation is done on Schedule 8812, which you attach to your Form 1040. If you use tax software or work with a tax preparer, they will perform this calculation for you.

How to Claim the Additional Child Tax Credit

You claim the Additional Child Tax Credit by filing a federal tax return, even if you normally would not have to file. You complete Schedule 8812 (Credits for may have access to Children and Other Dependents) and attach it to your Form 1040. The schedule asks for your earned income, the number of may have access to children, and their Social Security numbers.

You cannot claim the ACTC before you file your return. Some people mistakenly believe they can request the credit in advance or claim it separately from their tax return. The only way to receive the Additional Child Tax Credit is to file a complete tax return that includes Schedule 8812.

If you file electronically, the software will guide you through the Schedule 8812 questions. If you file on paper, you can read the form and instructions from IRS.gov. If you use a tax preparer, they will include Schedule 8812 in your return automatically if you meet the requirements.

When You Receive the Money

If you are owed an Additional Child Tax Credit, the IRS includes it in your overall tax refund. The timing depends on how you file. If you file electronically and choose direct deposit, you typically receive your refund within 21 days. If you file on paper, it may take four to six weeks.

The IRS processes refunds in the order they are received, so filing earlier in the tax season generally means a faster refund. You can check the status of your refund using the IRS "Where's My Refund?" tool on IRS.gov, which updates once per day.

If you owe other federal debts — such as back taxes, student loans in default, or child support — the IRS may offset your refund to pay those debts. You will receive a notice if this happens.

Income Limits and Phase-Out Rules

The Additional Child Tax Credit does not have an income phase-out in the traditional sense, but the amount you can receive is capped at 15 percent of your earned income above $2,500. This means that as your income rises, the potential credit rises with it, up to the maximum of $1,700 per child.

However, the regular Child Tax Credit (of which the ACTC is a refundable portion) does phase out at higher incomes. For the 2024 tax year, the regular Child Tax Credit begins to reduce for single filers with modified adjusted gross income over $400,000 and married filers over $800,000. If your income is in this range, you may receive less than the full credit amount.

Your modified adjusted gross income is generally your adjusted gross income (AGI) from your tax return, with certain modifications. Most working families will not reach the phase-out threshold.

Frequently Asked Questions

Can I get the Additional Child Tax Credit if I did not work during the year?

No. You must have earned income to claim the ACTC. If you had no wages or self-employment income, you cannot receive this credit, even if you have may have access to children. You may be able to claim other credits or deductions, so filing a return is still worth considering.

What if my child does not have a Social Security number yet?

Your child must have a valid Social Security number to be claimed on your tax return and to count toward the Additional Child Tax Credit. If your child was born late in the year and does not yet have a number, you can explore for one at the Social Security Administration and file an amended return once the number is issued.

Can two parents both claim the Additional Child Tax Credit for the same child?

No. Only one person can claim a child as a dependent in a given tax year. If you and another parent share custody, you must decide who will claim the child. The IRS has rules about which parent can claim a child in a divorce or separation situation; generally, the parent with primary custody claims the child unless they sign a form releasing the claim.

Do I have to file a tax return to get the Additional Child Tax Credit?

Yes. The ACTC is only available when you file a federal income tax return. You cannot claim it through any other process or in advance. Even if your income is low enough that you would not normally file, you should file to claim the ACTC and any other refundable credits you may be owed.

What happens if I claim a child who does not meet the requirements?

If you claim a child who does not meet the requirements, the IRS will disallow the credit during processing or in a later audit. You may be asked to repay the credit amount, plus interest and penalties. Make sure the child's age, residency, relationship, and Social Security number are correct before you file.