What the Child Tax Credit Is
The Child Tax Credit (CTC) is a federal tax credit that reduces the amount of federal income tax owed by families with qualifying children. The CTC is partially refundable through the Additional Child Tax Credit (ACTC) — meaning families who owe less tax than the credit amount can receive the difference as a cash refund, up to the refundable limit.
The CTC has been a central tool in child poverty reduction policy. The American Rescue Plan temporarily expanded the credit to $3,000–$3,600 per child in 2021 and made it fully refundable. Those expanded provisions expired, and in 2026 the credit has returned to the pre-expansion structure of up to $2,000 per child with limited refundability — though legislation to expand the credit again is regularly discussed in Congress.
Who Is a Qualifying Child
To claim the CTC for a child, that child must: be under age 17 at the end of the tax year, be your son, daughter, stepchild, eligible foster child, sibling, or descendant of any of those, have lived with you for more than half the tax year, not have provided more than half of their own support, have a valid Social Security number, and not have been claimed as a qualifying child by another taxpayer for the same year.
2026 CTC Amounts and Phase-Out
The maximum CTC in 2026 is $2,000 per qualifying child under 17. The credit phases out starting at $200,000 of modified AGI for single filers and $400,000 for married filing jointly — reducing by $50 for every $1,000 above the threshold. Most moderate-income families receive the full $2,000 per qualifying child. High-income families above the phase-out threshold receive a reduced credit or no credit.
The Refundable Portion — ACTC
The Additional Child Tax Credit (ACTC) is the refundable portion of the CTC — available when the CTC exceeds your tax liability. The ACTC is worth up to $1,700 per child in 2026. To be eligible for the ACTC, you must have earned income above $2,500. The refundable amount is calculated as 15% of your earned income above $2,500, up to the $1,700 per child maximum. This means a family with low earned income may receive less than the full $1,700 refundable amount even if they owe no taxes.
How to Claim the CTC
The CTC is claimed on Form 1040, with the refundable ACTC calculated on Schedule 8812. You must file a tax return to receive either portion. Tax preparation software (including IRS Free File) and VITA volunteers (see Free Tax Filing Options) will calculate both credits automatically based on your information. Common documentation needed: Social Security numbers for all qualifying children, proof of relationship and residency (school records, medical records, birth certificates).
CTC vs EITC — How They Work Together
The Child Tax Credit and Earned Income Tax Credit are separate credits with different rules, but they can both be claimed by the same family in the same year. Together they can provide significant tax relief and refunds for working families with children. Example: a single parent with two children and $35,000 in earned income might receive both the EITC (approximately $5,900) and the ACTC (approximately $2,800 refundable) — a total of approximately $8,700 in refundable credits. See Earned Income Tax Credit Guide and use the EITC Estimator to calculate both credits for your situation.
Looking Ahead — CTC Policy Uncertainty
The CTC's structure in 2026 reflects the expiration of temporary expansions from the 2021 American Rescue Plan. Congress has debated further expansions in subsequent years, including expanding the refundable portion, lowering the earnings threshold for refundability, or restoring higher per-child amounts. The Tax Cuts and Jobs Act provisions governing the current CTC structure are themselves scheduled to expire after 2025, making the 2026 CTC structure subject to potential legislative change. Check irs.gov for the most current information on CTC amounts and rules for your filing year.