The basic rules for claiming the child tax credit

The Child Tax Credit is a federal tax break that reduces the amount of income tax you owe if you have dependent children. To claim it, you must have a child under age 17 at the end of the tax year, claim that child as a dependent on your return, and meet income limits based on your filing status. The child must be a U.S. citizen, national, or resident alien with a valid Social Security number.

Your relationship to the child matters: the credit covers biological children, stepchildren, adopted children, and foster children. The child must live with you for more than half the tax year. If you are married filing jointly, both spouses must have valid Social Security numbers, and you cannot claim the credit if you file married filing separately.

The credit is worth up to $2,000 per child as of the 2024 tax year. The amount you receive depends on your income level and filing status. If your income exceeds certain thresholds, the credit begins to phase out — meaning it shrinks by $50 for every $1,000 (or fraction thereof) of income above the limit.

Key Takeaways

  • You must have a child under 17 with a valid Social Security number who lives with you for more than half the year to claim the credit.
  • Income limits vary by filing status: $400,000 for married filing jointly, $200,000 for single filers, and $200,000 for head of household.
  • The credit is worth up to $2,000 per child, but the amount phases out if your income exceeds the threshold for your filing status.
  • You claim the credit on your federal tax return using Form 1040 and Schedule 8812, or through tax software that walks you through the questions.

Income limits that determine how much you receive

The Child Tax Credit begins to reduce once your modified adjusted gross income (MAGI) exceeds a certain amount. For married couples filing jointly, that threshold is $400,000. For single filers and heads of household, it is $200,000. If you file married filing separately, the threshold is $200,000 for each spouse.

Once your income crosses the threshold, the credit decreases by $50 for every $1,000 of income above the limit. This means a married couple with $410,000 in income would lose $500 in credits (10 × $50). The reduction applies to each child, so a family with two children would lose $1,000 total.

Your MAGI is usually your adjusted gross income (AGI) as shown on your tax return. If you have foreign earned income or certain other types of income, your MAGI may be higher than your AGI. Check the IRS instructions for Form 1040 to see whether your situation requires a different calculation.

What counts as a may have access to child

A may have access to child must be under age 17 on December 31 of the tax year you are claiming the credit. The child must be your biological child, stepchild, adopted child, foster child, or a descendant of any of these (such as a grandchild). A child you claim as a dependent but who is not related to you does not count.

The child must be a U.S. citizen, national, or resident alien. They must have a valid Social Security number issued before the tax return is filed. If the Social Security number is issued after you file, you may be able to amend your return once you have the number.

The child must live with you for more than half the tax year. Temporary absences for school, medical care, military service, or vacation count as time living with you. If the child is born or dies during the year, that year still counts as long as the child lived with you for the time they were alive.

How to claim the credit on your tax return

If you file your taxes on paper, you report the Child Tax Credit on Form 1040 (the main federal income tax form) and Schedule 8812 (Additional Credits). You will list each may have access to child's name and Social Security number. The form asks whether you want the credit applied to reduce your tax or refunded to you as part of a refundable portion called the Additional Child Tax Credit.

If you use tax software, the program will ask you questions about your children and income, then calculate the credit automatically. You do not need to fill out Schedule 8812 yourself — the software does it. Most tax software is free if your income is below a certain level through the IRS Free File program.

You must file a complete and correct tax return to claim the credit. If you do not owe any federal income tax, you may still want to file to claim the credit, especially if you are may have access to to the refundable portion. The IRS processes returns and issues refunds over several weeks.

The difference between the regular and refundable credit

The Child Tax Credit has two parts: the regular (non-refundable) credit and the Additional Child Tax Credit (the refundable part). The regular credit reduces the amount of tax you owe. If the credit is larger than the tax you owe, the extra amount does not automatically come back to you — it straightforward disappears.

The Additional Child Tax Credit (also called the refundable Child Tax Credit) lets you receive up to $1,700 per child as a refund, even if you owe no tax. To claim the refundable portion, your earned income must be at least $2,500 for the year. The refundable amount is the smaller of $1,700 per child or 15 percent of your earned income above $2,500.

For example, if you have one may have access to child and earned $15,000, your refundable credit would be 15 percent of $12,500 ($15,000 minus $2,500), which equals $1,875. Since the maximum refundable credit is $1,700 per child, you would receive $1,700. If you earned $10,000, the refundable credit would be 15 percent of $7,500, which equals $1,125.

Special situations: divorced parents and custody

If you are divorced or separated, only one parent can claim the child as a dependent and receive the Child Tax Credit for that child in a given year. Usually, the parent with custody for the majority of the year claims the child. If custody is split equally, the parent with the higher adjusted gross income claims the child unless they agree otherwise.

The custodial parent can release the right to claim the child by signing Form 8332 (Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent). The non-custodial parent then attaches this form to their tax return to claim the credit. Without the form, the IRS will deny the non-custodial parent's claim.

If you have a custody order, the order itself does not automatically determine who claims the child for tax purposes. The tax rules are separate from custody law. You and the other parent must agree on who will claim the child each year, or follow the default rule (the custodial parent).

What happens if you claim a child you are not may have access to to claim

If you claim the Child Tax Credit for a child who does not meet the requirements, the IRS will disallow the credit when they process your return or during an audit. You will owe back the tax you saved, plus interest. If the IRS determines the error was intentional, you may also face a penalty.

The most common mistakes are claiming a child who does not live with you for more than half the year, claiming a child with an incorrect or missing Social Security number, or claiming a child that another parent is also claiming. If you realize you made a mistake before the IRS contacts you, you can file an amended return (Form 1040-X) to correct it.

If the IRS sends you a notice that you claimed a child incorrectly, respond promptly with documentation such as birth certificates, custody orders, or proof of residence. Ignoring the notice will result in the credit being removed and additional penalties.

Frequently Asked Questions

Can I claim the credit if my child does not have a Social Security number yet?

No. Your child must have a valid Social Security number before you file your return. If your child was born late in the year and you have not yet received their Social Security number, you can file your return without claiming the child, then file an amended return once the number arrives. Some tax software will let you file with a pending number and update it later.

What if I share custody with the other parent?

If custody is split equally, the parent with the higher income claims the child unless you both agree otherwise. If one parent has the child more than half the year, that parent claims the child. You can alternate years claiming the child only if you both agree in writing and the custodial parent signs Form 8332 for the years the other parent will claim.

Does the credit reduce my refund?

No. The credit reduces the tax you owe, which increases your refund. If you owe $3,000 and have a $2,000 credit, you now owe $1,000. If you had $2,500 withheld from your paychecks, your refund would be $1,500 instead of $500.

Can I claim the credit if my child is over 16?

No. The child must be under 17 on December 31 of the tax year. Once they turn 17, they no longer count for the Child Tax Credit, though you may be able to claim other credits such as the Credit for Other Dependents if they still meet the dependent requirements.

What if my income is above the phase-out limit?

You can still claim the credit, but it will be reduced. For every $1,000 (or fraction of $1,000) of income above the threshold, the credit shrinks by $50 per child. If your income is far above the limit, the credit may be reduced to zero, but you should still calculate it to be sure.