What Is the Child Tax Credit and Who Qualifies?

The Child Tax Credit is a federal tax credit worth up to $2,200 for each qualifying child under 17, and up to $1,700 of that amount can come back to you as a refund even if you owe no tax. The One Big Beautiful Bill Act, signed on July 4, 2025, made those amounts permanent and set them to adjust for inflation each year.¹ Whether you qualify turns on your child’s age, your relationship to the child, how long you lived together, and your income.

How Much the Credit Is Worth

For the 2025 tax year (the return you file in 2026), the maximum credit is $2,200 per qualifying child.² A credit cuts your tax bill dollar for dollar, unlike a deduction, which only reduces the income you’re taxed on.

Part of that $2,200 is refundable. The refundable piece, called the Additional Child Tax Credit (ACTC), caps at $1,700 per child.² The remaining $500 is non-refundable, so it can zero out tax you owe but cannot generate a refund on its own.

To get any of the refundable portion, you need earned income of at least $2,500.³ The ACTC equals 15% of what you earned above $2,500, up to the $1,700 cap per child. A parent who earned $12,500, for example, would run the math on $10,000 and land at a potential $1,500 per child. Roughly $13,833 in earned income gets you to the full $1,700 for one child.

Starting with 2025, the per-child amount adjusts for inflation each year.⁴ The IRS releases the new figure in the fall for the following tax year.

Who Counts as a Qualifying Child

The child has to pass every one of the following tests. Fail one, and the child does not qualify for that year.

Age. Under 17 at the end of the tax year. A child who turns 17 on December 31 is out.²
Relationship. Your son, daughter, stepchild, foster child, or a descendant of any of them, such as a grandchild. Siblings, stepsiblings, and their descendants also qualify if you provide the required care. Adopted children, including those lawfully placed for adoption, always count as your own.²
Residency. The child lived with you for more than half the year. Time away for school, medical care, or vacation still counts as time with you.²
Support. The child did not pay more than half of their own living expenses during the year.
Citizenship. U.S. citizen, U.S. national, or U.S. resident alien.²
Social Security number. A valid SSN authorized for U.S. employment, issued before the due date of your return (including extensions). An ITIN does not work for the CTC or ACTC.³

Income Limits

You get the full credit if your adjusted gross income is at or below $200,000, or $400,000 if you’re married filing jointly.³ Above the threshold, the credit drops by $50 for every $1,000 of income over the line, and any fraction of $1,000 is treated as a full $1,000.

The higher your income above the threshold and the fewer children you claim, the sooner the credit disappears entirely. A single filer with one child, for instance, loses the credit completely at about $244,000 in AGI. Joint filers have far more room because their phase-out starts at $400,000.

What If My Dependent Doesn’t Qualify for the CTC

You may still be able to claim a $500 non-refundable Credit for Other Dependents (ODC) for a dependent who does not meet the CTC rules, whether that’s a 17-year-old, a dependent without an employment-authorized SSN, an elderly parent you support, or a college-age dependent who’s a qualifying relative rather than a qualifying child.⁵

The ODC phases out at the same $200,000 and $400,000 income thresholds and is entirely non-refundable. The dependent needs an SSN, ITIN, or Adoption Taxpayer Identification Number and must be a U.S. citizen, national, or resident alien, or a resident of Canada or Mexico.⁶ You claim it on Schedule 8812, the same form used for the CTC.

Divorced or Separated Parents

Only one parent can claim the credit for a given child in a given year. By default, that’s the custodial parent, meaning the one the child lived with for the greater part of the year.⁷ The IRS looks at actual nights in each home, not the language of a custody order.

The custodial parent can release the claim to the noncustodial parent by signing IRS Form 8332, which the noncustodial parent then attaches to their return each year they claim the child.⁸ The release can cover one year, specific future years, or all future years. Even with a release in place, only the custodial parent can claim head-of-household filing status, the dependent care credit, and the Earned Income Tax Credit tied to that child.⁷

If the child spent exactly equal time with each parent and neither files jointly with the child, the credit goes to the parent with the higher AGI.

How to Claim It

List each qualifying child on Form 1040 (or Form 1040-SR if you’re 65 or older) and attach Schedule 8812, Credits for Qualifying Children and Other Dependents.³ Schedule 8812 handles the math for both the non-refundable CTC and the refundable ACTC, and most tax software fills it in from the dependent information you enter.

Hold on to records that show each child’s residency: school enrollment papers, medical records, statements from childcare providers. You don’t send them in with your return, but you’ll need them if the IRS questions your claim.

One timing point. If your refund includes the ACTC or the Earned Income Tax Credit, federal law requires the IRS to hold the entire refund until mid-February, even if you filed the first week of January.⁹ Direct-deposit refunds typically arrive by late February when nothing else on the return draws review.

Penalties for Improper Claims

Claiming the credit for a child who doesn’t qualify costs more than the credit itself. If the IRS finds the claim was made with reckless or intentional disregard for the rules, you face a two-year ban on claiming the CTC, ACTC, and related credits.¹⁰ A fraudulent claim triggers a ten-year ban. During the ban you lose the credit even for children who legitimately qualify.

Most trouble starts with residency: claiming a child who spent most of the year in another household, or both parents claiming the same child with no Form 8332 in place. When you’re not sure a child qualifies, sort it out before you file.

1
Internal Revenue Service. One, Big, Beautiful Bill Provisions
2
Internal Revenue Service. Instructions for Schedule 8812 (Form 1040)
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Internal Revenue Service. Child Tax Credit
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National Conference of State Legislatures. Child Tax Credit Overview
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Internal Revenue Service. Parents – Check Eligibility for the Credit for Other Dependents
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Internal Revenue Service. Dependents
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Internal Revenue Service. Divorced and Separated Parents
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Internal Revenue Service. Form 8332 – Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent
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U.S. Senate Finance Committee. Summary of the Protecting Americans From Tax Hikes Act of 2015
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Taxpayer Advocate Service. Erroneously Claiming Certain Refundable Tax Credits Could Lead to Being Banned From Claiming the Credits