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What Is the Child Tax Credit?
The Child Tax Credit (CTC) is one of the most valuable tax breaks available to American families. For tax year 2024, eligible parents and guardians can claim up to $2,000 per qualifying child under age 17 to directly reduce their federal income tax liability. Unlike a deduction, which merely reduces the income subject to tax, the CTC is a dollar-for-dollar reduction in the tax you owe. If your tax bill is $5,000 and you have three qualifying children, the $6,000 CTC can reduce your bill to zero, and the refundable portion, called the Additional Child Tax Credit, may generate a refund for the remaining $1,000 you couldn't use against a tax balance.
Congress created the Child Tax Credit in 1997 to give families direct relief for the cost of raising children. The credit has been expanded and modified several times since, most significantly by the Tax Cuts and Jobs Act of 2017, which doubled the maximum credit from $1,000 to $2,000 and raised the income phase-out thresholds substantially. The American Rescue Plan Act of 2021 temporarily boosted the credit to $3,000 to $3,600 per child for a single year; those expanded amounts expired, and 2024 returns use the $2,000 TCJA framework unless Congress acts. Use our child tax credit calculator above to see exactly what your family qualifies for under the current rules.
According to the IRS Child Tax Credit page, the credit is claimed on Schedule 8812 (Credits for Qualifying Children and Other Dependents), which is attached to Form 1040. You must report each qualifying child's valid Social Security number on the schedule.
Qualifying Child Requirements for the Child Tax Credit
To count a child in the child tax credit calculator, that child must satisfy all of the IRS qualifying child tests for 2024. First, the age test: the child must be under 17 years old on December 31, 2024. A child who turns 17 on January 1, 2025 still qualifies for 2024; a child who turns 17 on December 31, 2024 does not. Second, the relationship test: the child must be your son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of any of these (such as a grandchild, niece, or nephew).
Third, the residency test: the child must have lived with you for more than half the year. Temporary absences for school, vacation, medical care, or detention count as time lived with you. Fourth, the support test: the child must not have provided more than half of their own financial support during the year. Fifth, the joint return test: the child cannot file a joint return with a spouse unless they're filing only to claim a refund. Finally, the Social Security number test: each qualifying child must have a valid SSN issued by the Social Security Administration before the due date of your return. Children without valid SSNs may qualify for the $500 Other Dependent Credit instead. You can find the full rules in IRS Publication 972.
CTC vs. ACTC: Non-Refundable and Refundable Portions
The CTC has two components, and understanding the difference between them is essential for accurate tax planning. The non-refundable CTC can reduce your federal income tax liability to zero but cannot generate a refund. If you have two qualifying children ($4,000 total CTC) but only owe $1,500 in federal tax, only $1,500 of the non-refundable CTC is usable, the remaining $2,500 is lost unless the refundable component kicks in.
The Additional Child Tax Credit (ACTC) is the refundable slice. For 2024, it equals 15% of your earned income above $2,500, capped at $1,700 per qualifying child. Earned income includes wages, salaries, tips, and net self-employment income, but not investment income, Social Security, or unemployment benefits. If your earned income is $22,500, your ACTC calculation is ($22,500 − $2,500) × 15% = $3,000, subject to the $1,700 per-child cap. With two children, the cap is $3,400, so you'd receive $3,000 as a refundable ACTC. Lower-income families with limited tax liability often receive most or all of their child tax credit through the ACTC rather than the non-refundable CTC. Our child tax credit calculator separates these two figures so you know exactly what to expect on your return. You can also explore our earned income tax credit calculator to see whether you qualify for additional refundable credits.
How the 2024 Child Tax Credit Income Phase-Out Works
The child tax credit is subject to an income-based phase-out that reduces the credit for higher earners. For 2024, the phase-out thresholds are:
- $200,000 Single, Head of Household, Married Filing Separately
- $400,000 Married Filing Jointly
Above these thresholds, the credit is reduced by $50 for every $1,000 (or portion thereof) of AGI over the limit. Because the reduction applies to every started $1,000, a single filer with $200,001 of AGI faces the same $50 reduction as one with $200,999. For a family with three qualifying children claiming a maximum $6,000 CTC, the credit is fully phased out when AGI reaches $320,000 for single filers or $520,000 for joint filers. Married couples with higher incomes should consider whether the married filing jointly threshold of $400,000 allows them to retain a credit that would be eliminated if they filed separately, in most cases, MFJ is the better choice for CTC purposes. Use our tax bracket calculator to see how the CTC interacts with your overall federal income tax picture.
The phase-out applies to the entire $2,000 per-child CTC. It reduces the non-refundable portion first. The refundable ACTC is calculated independently based on earned income and is also subject to the per-child cap of $1,700 rather than a separate phase-out. High-income families above the phase-out range lose the CTC entirely but may retain a small ACTC if their earned income generates a credit under the 15%-of-earned-income formula, though this rarely applies once AGI exceeds the full phase-out point.
How to Claim the Child Tax Credit
To claim the Child Tax Credit and Additional Child Tax Credit, you must file a federal income tax return (Form 1040) and attach Schedule 8812 (Credits for Qualifying Children and Other Dependents). Schedule 8812 is where you list each qualifying child's name and Social Security number, calculate the non-refundable CTC, and determine whether you qualify for the refundable ACTC. Your tax software will generate Schedule 8812 automatically when you enter your dependents' information. If you file a paper return, you can download Schedule 8812 from the IRS forms and publications page.
If you have advance Child Tax Credit payments from a previous year on record with the IRS (as occurred during 2021), you may receive a Letter 6419 showing the total advance CTC paid. For 2024, there is no advance CTC payment program in place, so you will claim the full credit on your annual return. Keep records of your children's SSNs, residency documentation (such as school enrollment letters or medical records showing your home address), and any childcare expenses that might interact with the Child and Dependent Care Credit, which is a separate credit calculated on Form 2441. For a complete view of your tax liability, pair the child tax credit calculator with our tax refund calculator and explore all of our tax tools to make sure you're capturing every credit and deduction available to your family.
The Child Tax Credit is one of the federal government's largest tax expenditures for individuals, benefiting tens of millions of households annually. Taking a few minutes to run the child tax credit calculator before you file ensures you're claiming every dollar you're entitled to.