The Additional Child Tax Credit Explained

The Additional Child Tax Credit (ACTC) is a refundable portion of the regular Child Tax Credit. This means that if the credit is larger than the taxes you owe, the IRS sends you the difference as a refund — you do not lose the extra money.

The regular Child Tax Credit reduces the federal income tax you owe. The ACTC lets you claim money back even if you have no tax bill at all. For example, if you owe $500 in taxes and your Child Tax Credit is $2,000, the credit covers your $500 bill and the ACTC refunds you $1,500 (subject to the income limits and rules below).

The ACTC is calculated on IRS Form 8812 and attached to your tax return. You do not file it separately — it is part of the standard tax filing process.

Key Takeaways

  • The ACTC refunds you money if your Child Tax Credit is larger than your tax bill, rather than letting the extra credit disappear.
  • For 2024, the maximum ACTC is $1,700 per child under age 17, though the amount you receive depends on your earned income and filing status.
  • You must have earned income (wages, self-employment income, or certain other sources) to claim the ACTC — investment income alone does not count.
  • The ACTC phases out at higher income levels, and the phase-out thresholds differ by filing status.

Income Requirements and Phase-Out Thresholds

To claim the ACTC, you must have earned income for the year. Earned income includes wages from a job, self-employment income, and certain other sources. Income from investments, rental property, or Social Security does not count toward the ACTC calculation.

The amount of ACTC you can claim begins to shrink once your income exceeds a certain threshold. For 2024, the phase-out begins at $400,000 for married couples filing jointly and $200,000 for single filers and heads of household. For each $1,000 (or fraction thereof) over the threshold, the ACTC reduces by $50.

If your income is below the phase-out threshold, you may be able to claim the full ACTC amount for each child. The IRS calculates this on Form 8812 when you file your return.

How the ACTC Amount Is Calculated

The ACTC is not a flat amount for everyone. The IRS uses a formula based on your earned income and the number of children you claim.

For 2024, the ACTC is the smaller of two numbers: either 15 percent of your earned income over $2,500, or the unused portion of your Child Tax Credit. This means if you earned $20,000 and have one child, 15 percent of the amount over $2,500 is $2,625 — but the Child Tax Credit itself is $2,000 per child, so your ACTC would be limited to $2,000 (the unused portion after your tax bill is covered).

The calculation is automatic when you file. You do not need to do the math yourself — the IRS or tax software handles it on Form 8812.

Who Can Claim the Additional Child Tax Credit

You can claim the ACTC if you have a may have access to child under age 17 at the end of the tax year. The child must be your son, daughter, stepchild, foster child, sibling, or descendant of any of these (such as a niece or nephew), and you must provide more than half their financial support for the year.

The child must have a valid Social Security number and be a U.S. citizen, national, or resident alien. You must also have earned income — even a small amount — to claim the ACTC.

If you are married, you can claim the ACTC only if you file a joint return. If you are married filing separately, neither spouse can claim it.

The Difference Between the Child Tax Credit and the ACTC

The Child Tax Credit is a non-refundable credit that reduces your tax bill dollar for dollar, up to $2,000 per child under 17 for the 2024 tax year. If you owe $1,200 in taxes and claim one child, the credit covers your entire bill and leaves $800 unused.

The ACTC is the refundable part of that credit. It lets you claim the unused $800 as a refund. Without the ACTC, that $800 would straightforward disappear — you would not owe it, but you would not receive it either.

In other words, the Child Tax Credit is what reduces your tax bill first. The ACTC is what the IRS pays back to you if the credit is larger than what you owe.

How to Claim the Additional Child Tax Credit on Your Return

If you file your taxes yourself using tax software, the software will ask about your children and earned income. It automatically calculates whether you may have access to for the ACTC and includes Form 8812 in your return if needed.

If you file by hand, you complete Form 8812 (Credit for Other Dependents) and attach it to your Form 1040. The form asks for your earned income, the number of may have access to children, and your filing status. The IRS uses this information to calculate your ACTC amount.

You do not need to send any documents with your return to prove the child is yours — but keep records (birth certificates, Social Security cards, proof of support) in case the IRS asks questions later.

Common Situations That Affect Your ACTC

If you have no earned income for the year, you cannot claim the ACTC, even if you have children and would otherwise may have access to for the Child Tax Credit. This is the most common reason people do not receive the refundable portion.

If you earned income but it was very low, your ACTC may be smaller than the full Child Tax Credit. For example, if you earned $3,000, your ACTC would be 15 percent of $500 (the amount over $2,500), which is $75 — much less than the $2,000 credit itself.

If your income is above the phase-out threshold, your ACTC shrinks by $50 for every $1,000 over the limit. High earners may have little or no ACTC available, even though they still have the regular Child Tax Credit.

Frequently Asked Questions

Can I get the ACTC if I did not work during the year?

No. The ACTC requires earned income — wages, self-employment income, or certain other sources. If you had no earned income, you cannot claim the ACTC, even if you have may have access to children and would otherwise be may be able to access for the Child Tax Credit.

What counts as earned income for the ACTC?

Earned income includes wages from a job, self-employment income, and certain other sources such as taxable scholarship or fellowship grants. It does not include investment income, rental income, Social Security, unemployment benefits, or child support.

Can I claim the ACTC if I file married filing separately?

No. If you are married, you must file a joint return to claim the ACTC. If you file separately, neither spouse can claim it, even if one spouse has earned income and may have access to children.

What happens if my income is above the phase-out threshold?

Your ACTC shrinks by $50 for every $1,000 (or fraction thereof) that your income exceeds the threshold. For 2024, the threshold is $400,000 for married filing jointly and $200,000 for single filers. You may still have some ACTC available, but it will be less than the maximum.

Do I need to send proof that the child is mine when I file?

No. You do not attach documents to your return, but keep birth certificates, Social Security cards, and proof of support on file. If the IRS questions your claim, you will need to provide these documents to verify the child is yours and that you provided more than half their support.