The Child Tax Credit Reduces Your Tax Bill by Up to $2,000 Per Child

The Child Tax Credit is a reduction in the amount of federal income tax you owe, worth up to $2,000 for each child under 17 who lives with you and is a U.S. citizen, national, or resident alien. You claim it on your tax return when you file. The credit does not pay you money directly unless you are owed a refund after all your taxes are calculated — it first reduces what you owe, and any leftover amount may come back to you as a refund.

The credit phases out if your income exceeds a certain threshold. For the 2024 tax year, the phase-out begins at $400,000 for married couples filing jointly and $200,000 for single filers. The exact amount you receive depends on your income, the number of may have access to children, and whether you have other tax credits or deductions.

Key Takeaways

  • The Child Tax Credit is worth up to $2,000 per may have access to child under 17 and reduces your federal income tax bill directly.
  • 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.
  • The credit begins to shrink if your income is above $400,000 (married filing jointly) or $200,000 (single), decreasing by $50 for every $1,000 over the limit.
  • If the credit is larger than the tax you owe, you may receive the difference as a refund, up to $1,700 per child for the 2024 tax year.

Who Can Claim a Child on the Credit

To claim a child, you must be the parent, stepparent, or legal guardian, and the child must be your biological child, stepchild, adopted child, or foster child. The child must be under 17 at the end of the tax year, live with you for more than half the year, and be a U.S. citizen, national, or resident alien. You must also provide their valid Social Security number on your return.

Only one person can claim each child. If parents are divorced or separated, the parent with primary custody typically claims the child, though the other parent can claim the child if the custodial parent signs a written agreement allowing it. If you are not married and share custody, the parent with whom the child lived for the greater number of nights during the year claims the credit.

Income Limits and How the Credit Shrinks

The credit does not disappear entirely when you exceed the income threshold — it decreases gradually. For every $1,000 (or fraction thereof) that your income exceeds the limit, the credit reduces by $50 per child. For example, if you are single with one child and earn $201,000, you are $1,000 over the $200,000 threshold, so your $2,000 credit becomes $1,950.

Your income for this calculation is your modified adjusted gross income (MAGI), which is usually the same as your adjusted gross income (AGI) shown on your tax return. If you are married filing separately, the threshold is $200,000 for both spouses. The phase-out can significantly reduce or eliminate the credit if your income is substantially higher than the threshold.

Refundable vs. Non-Refundable Portions

The Child Tax Credit has two parts. The first $1,300 per child (for 2024) is non-refundable, meaning it can only reduce your tax bill to zero — you cannot receive money back beyond that. The remaining amount, up to $700 per child, is refundable through the Additional Child Tax Credit, which means you can receive it as a refund even if you owe no tax.

To receive the refundable portion, you must have earned income during the year — typically from wages, self-employment, or other work. If you have no earned income, you cannot receive the refundable part. The refundable portion is limited to 15 percent of your earned income above $2,500, which can further reduce the amount you receive.

How to Claim the Credit on Your Tax Return

You claim the Child Tax Credit on Form 1040 (the main federal income tax form) or through tax software if you file electronically. You will need the child's name, date of birth, and Social Security number. The form asks how many may have access to children you have, and the credit is calculated automatically based on your income and filing status.

If you use tax software or hire a tax preparer, they will walk you through the questions needed to determine your credit amount. If you file by hand, you calculate the credit using the worksheet in the Form 1040 instructions. Make sure you have all required information before you file, because errors in the child's name or Social Security number can delay your refund or trigger an IRS notice.

Changes to the Credit Over Time

The Child Tax Credit has changed several times in recent years. The 2017 Tax Cuts and Jobs Act increased the credit from $1,000 to $2,000 per child and raised the income thresholds. The American Rescue Plan of 2021 temporarily increased the refundable portion and allowed advance payments to be sent monthly to families, but those changes expired at the end of 2021.

For 2024 and beyond, the credit is $2,000 per child with the income thresholds and refundable limits described above. Congress has proposed various changes to expand or modify the credit, but no new law has passed. When you file your taxes, use the rules in effect for the year you are filing, which your tax software or preparer will explore automatically.

Other Tax Credits That Work With the Child Tax Credit

The Child Tax Credit is separate from the Earned Income Tax Credit (EITC), which is a different credit for lower-income workers. You can claim both credits in the same year if you meet the requirements for each. The EITC is based on your earned income and filing status, while the Child Tax Credit is based on the number of may have access to children and your total income.

You can also claim the Child and Dependent Care Credit if you paid for childcare so you could work. This credit is separate from the Child Tax Credit and is calculated differently. If you have multiple children or pay for care, you may be able to claim both credits, though each has its own rules and limits.

Frequently Asked Questions

Can I claim the Child Tax Credit if my child does not have a Social Security number?

No. Your child must have a valid Social Security number to be claimed. If your child was born in the United States, you can obtain a Social Security number through the Social Security Administration. If your child is not a U.S. citizen, they must be a resident alien with a valid number to may have access to.

What if I share custody with the other parent?

The parent with whom the child lived for the greater number of nights during the year claims the credit. If the nights are equal, the parent with the higher adjusted gross income claims the child. The other parent cannot claim the same child unless they have a written agreement from the custodial parent.

Do I lose the entire credit if my income is too high?

No. The credit phases out gradually — it decreases by $50 for every $1,000 over the income limit, but does not disappear completely unless your income is very high. For example, a single parent with one child would lose the entire $2,000 credit only if their income exceeded $240,000.

Can I claim the credit if my child turned 17 during the year?

No. The child must be under 17 at the end of the tax year in which you are claiming the credit. If your child turned 17 on December 31, they do not may have access to for that year. However, you may be able to claim other credits, such as the Credit for Other Dependents, which is worth $500 per dependent.

What happens if I claimed the wrong child or made a mistake on my return?

Contact the IRS if you discover an error after filing. You can file an amended return using Form 1040-X to correct the child's name, Social Security number, or other information. The IRS will recalculate your credit and send you a notice showing the correct amount you owe or are owed.