The Additional Child Tax Credit is for lower-income families who owe little or no income tax

The Additional Child Tax Credit (ACTC) is a refundable portion of the Child Tax Credit. If your tax bill is smaller than the credit you are owed, the IRS sends you the difference as a refund. This matters because most tax credits only reduce what you owe — they do not send money back if the credit is larger than your tax bill. The ACTC does.

You do not need to have a tax bill to receive it. The credit is based on your earned income (wages, self-employment income, or farm income), not on whether you owe taxes. If you earned at least $2,500 in 2024, you may receive a refund even if your income is low enough that you owe zero federal income tax.

The maximum ACTC for 2024 is $1,700 per may have access to child under 17. The exact amount depends on how much earned income you had during the year. The IRS calculates this on your tax return.

Key Takeaways

  • The Additional Child Tax Credit sends money back to you if the Child Tax Credit is larger than the taxes you owe.
  • You must have earned income of at least $2,500 in the tax year to receive any ACTC.
  • Each may have access to child under 17 can result in up to $1,700 in refundable credit for the 2024 tax year.
  • You claim the ACTC on your federal tax return using Form 1040 and Schedule 8812.
  • The child must have a valid Social Security number, live with you for more than half the year, and be claimed as your dependent.

Income and earned income requirements

To receive any ACTC, you must have earned income during the tax year. Earned income includes wages from a job, net self-employment income, or farm income. It does not include investment income, unemployment benefits, Social Security, or child support.

The minimum earned income threshold is $2,500. If you earned less than $2,500, you cannot receive the ACTC, even if you have may have access to children. There is no maximum income limit for the ACTC itself, but your income affects how much credit you receive. The credit is calculated as 15 percent of earned income above $2,500, up to the maximum of $1,700 per child.

For example, if you earned $10,000 and have one may have access to child, your ACTC would be 15 percent of $7,500 ($10,000 minus $2,500), which equals $1,125. If you earned $13,333 or more with one child, you would receive the full $1,700.

Who counts as a may have access to child

A child must meet four conditions to count toward your ACTC. First, the child must be under 17 years old at the end of the tax year. Second, the child must have a valid Social Security number issued before the tax return is filed. Third, the child must be your son, daughter, stepchild, foster child, brother, sister, or a descendant of any of these (such as a niece or nephew). Fourth, the child must live with you for more than half the tax year.

The child must also be claimed as your dependent on your tax return. You cannot claim the ACTC for a child you do not claim as a dependent, and only one person can claim each child. If parents are divorced or separated, the parent with custody for the longer part of the year typically claims the child, unless they have a written agreement saying otherwise.

How the credit amount is calculated

The ACTC is the smaller of two amounts: 15 percent of your earned income above $2,500, or the unused portion of your Child Tax Credit. Most families receive the full $1,700 per child (for 2024) because their earned income is high enough to reach that amount.

If you earned $13,333 or more in 2024 with one may have access to child, you receive the maximum $1,700 ACTC. If you earned between $2,500 and $13,333, multiply your earned income above $2,500 by 0.15 to find your credit. With two may have access to children, the maximum is $3,400, and you would need earned income of about $24,667 to reach it.

The IRS uses the income figure from your tax return to calculate this. If you file jointly with a spouse, you use your combined earned income. If you file separately, each spouse uses only their own earned income.

How to claim the ACTC on your tax return

You claim the ACTC by filing a federal income tax return, even if you would normally have no tax bill. Use Form 1040 (the main individual income tax form) and attach Schedule 8812, which is where you calculate and claim the ACTC.

On Schedule 8812, you list each may have access to child's name and Social Security number. You enter your earned income and follow the worksheet to calculate your credit. The form then tells you whether you receive the full ACTC or a reduced amount based on your income.

If you use tax software or work with a tax preparer, they will handle these forms for you. If you file by hand, you can read the forms and instructions from the IRS website (irs.gov). The instructions include a worksheet that walks you through the calculation step by step.

When the ACTC is reduced or unavailable

The ACTC is reduced if your earned income is below $13,333 (for one child in 2024). It is also reduced if you claim other credits that use up your Child Tax Credit first. For example, if you claim the Earned Income Tax Credit (EITC), the IRS applies your Child Tax Credit to reduce your tax bill before calculating your ACTC.

You cannot receive the ACTC if you have no earned income, even if you have may have access to children. You also cannot receive it if the child does not have a valid Social Security number or if you do not claim the child as your dependent.

If you are a resident alien, you may still claim the ACTC if you have earned income and meet all other requirements. However, nonresident aliens cannot claim the ACTC. Your tax filing status and residency determine whether you are may be able to access.

Frequently Asked Questions

Can I get the ACTC if I do not owe any taxes?

Yes. The ACTC is refundable, which means the IRS will send you money even if you owe zero taxes. You must have earned income of at least $2,500 and claim may have access to children on your return. The IRS sends the refund to your bank account or by check, depending on how you file.

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

Your child must have a valid Social Security number before you file your return. If your child was born late in the year and does not have a number yet, you can request one from the Social Security Administration. You cannot claim the ACTC without it, but you can file your return once the number arrives and claim the credit on an amended return.

Can I claim the ACTC for a grandchild I am raising?

Yes, if the grandchild lives with you for more than half the year and you claim them as your dependent. The grandchild must be under 17 and have a valid Social Security number. You follow the same process as you would for your own child.

Does self-employment income count toward the $2,500 minimum?

Yes. Self-employment income counts as earned income for the ACTC. You use your net self-employment income (after business expenses) to meet the $2,500 threshold and to calculate your credit amount. Farm income also counts.

What happens if I claim a child and my ex-spouse also claims them?

The IRS will reject one of the claims because only one person can claim each child. You may need to file an amended return or work with the IRS to resolve the conflict. It is best to have a clear custody or support agreement in writing to avoid this problem.