You qualify for the Additional Child Tax Credit for tax year 2025 if you have at least one child under 17 who has a valid Social Security number, lived with you in the United States for more than half the year, and meets the other dependency tests, and if you earned at least $2,500 from work.1Internal Revenue Service. Child Tax Credit The ACTC is the refundable portion of the Child Tax Credit, so it puts money in your pocket even when you owe no federal income tax, up to $1,700 per qualifying child.2Internal Revenue Service. 2025 Instructions for Schedule 8812 (Form 1040)
Eligibility runs on two tracks: the child has to pass a set of tests, and you as the filer have to pass your own. Both must line up.
Tests the Child Has to Pass
Every one of these applies. Miss a single test and the child does not count for the ACTC.
Age
The child must be under 17 at the end of the tax year.3Office of the Law Revision Counsel. 26 USC 24 – Child Tax Credit A child who turns 17 during 2025 is out for that year, though they may still qualify you for the smaller Credit for Other Dependents.
Relationship
The list is broader than many parents assume. Biological children, adopted children, stepchildren, and foster children placed with you by an authorized agency all qualify. So do siblings, stepsiblings, and any of their descendants.4Office of the Law Revision Counsel. 26 USC 152 – Dependent Defined A grandchild, niece, or nephew can qualify if the rest of the tests are met.
Residency
The child has to live with you in the United States for more than half the tax year.3Office of the Law Revision Counsel. 26 USC 24 – Child Tax Credit Time away for school, medical care, or vacation still counts as time living with you.
Support
The child cannot have provided more than half of their own financial support during the year.5IRS.gov. Module 4 – Dependents A teenager with a part-time job is fine as long as their earnings did not cover most of their living expenses.
Social Security Number
The child needs a valid Social Security number issued before the due date of your return, including extensions.6Internal Revenue Service. Dependents An ITIN or an Adoption Taxpayer Identification Number does not satisfy this requirement for the ACTC, though a child with one of those numbers may still qualify you for the Credit for Other Dependents.7Internal Revenue Service. Child Tax Credit 4
Tests You Have to Pass as the Filer
You can file with either a Social Security number or an Individual Taxpayer Identification Number.1Internal Revenue Service. Child Tax Credit You also need to be a U.S. citizen, U.S. national, or resident alien for the year.
If you are not a citizen or green card holder, resident alien status usually depends on the Substantial Presence Test: at least 31 days in the U.S. during the current year and at least 183 days over three years, counting all days in the current year, one-third of the days in the prior year, and one-sixth of the days two years back.8Internal Revenue Service. Substantial Presence Test Nonresident aliens generally cannot claim the ACTC.
The Earned Income Requirement
Eligibility for a refund requires at least $2,500 in earned income, meaning wages, salary, or net self-employment income.1Internal Revenue Service. Child Tax Credit Below that floor, the ACTC is zero no matter how many qualifying children you have.
Above the floor, the IRS multiplies your earned income above $2,500 by 15% to figure the refundable amount, capped at $1,700 per qualifying child.3Office of the Law Revision Counsel. 26 USC 24 – Child Tax Credit2Internal Revenue Service. 2025 Instructions for Schedule 8812 (Form 1040) A worker earning $20,000 with one qualifying child would calculate 15% of $17,500, which is $2,625; because that exceeds the cap, the refund tops out at $1,700. A worker earning $8,000 would calculate 15% of $5,500 and get $825.
Families with three or more qualifying children have an alternative calculation available that compares Social Security and Medicare taxes against the Earned Income Tax Credit. The IRS uses whichever method produces the larger refund.
Keep in mind that the ACTC only comes into play if the regular Child Tax Credit (worth up to $2,200 per child for 2025) does not get fully used against your tax bill.9Internal Revenue Service. Tax Credits for Individuals Whatever portion of the CTC you cannot absorb because you owe too little tax is what the ACTC formula is applied to. If your tax liability is high enough to soak up the entire CTC, there is nothing left to refund.
Income Ceilings That Phase the Credit Out
The Child Tax Credit begins to shrink once modified adjusted gross income exceeds $200,000 for single filers and heads of household, or $400,000 for married couples filing jointly.1Internal Revenue Service. Child Tax Credit Every $1,000 of income above the threshold cuts the credit by $50. Because the ACTC is calculated from what remains of the CTC, the phase-out reduces both.
Divorced or Separated Parents
Only one parent can claim a child for the CTC and ACTC in a given year. By default, that is the parent the child lived with for the longer part of the year. If time was exactly equal, the parent with the higher adjusted gross income claims the credit.10IRS. Tie-Breaker Rule
A custodial parent can release the claim to the noncustodial parent by signing Form 8332.11IRS. Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent For the release to be valid, the child must have gotten more than half of their support from one or both parents and been in the custody of one or both parents for more than half the year. The noncustodial parent has to attach the signed Form 8332 to their return every year they claim the credit. For divorce or separation agreements that took effect after 2008, attaching pages from the agreement is not enough; the signed form is required.
A custodial parent who changes their mind can revoke the release using Part III of Form 8332. The revocation takes effect no earlier than the tax year after the noncustodial parent receives a copy.12IRS.gov. Form 8332 Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent
A Special Rule for Military Combat Pay
Nontaxable combat pay does not normally count in earned income, which can shrink or eliminate your ACTC. The IRS lets service members elect to include nontaxable combat pay as earned income for this calculation.13Internal Revenue Service. Military and Clergy Rules for the Earned Income Tax Credit The combat pay figure appears on the W-2 in box 12 with code Q. When both spouses have combat pay, each decides independently.
The election helps in some cases and hurts in others, so it is worth running the numbers both ways. Tax software will do this automatically when box 12 information is entered correctly.
Prior Denials and Bans
Past problems with this credit can knock you out of eligibility. If the IRS previously denied your CTC or ACTC for a reason other than a math error, you have to file Form 8862 with your next return before the credit can be allowed again.14Internal Revenue Service. What to Do if We Deny Your Claim for a Credit Once the IRS accepts the credit after reviewing Form 8862, you generally do not need to file it again unless the credit is denied a second time.
If the IRS found that you claimed the credit with reckless or intentional disregard of the rules, you are barred from claiming it for two years.15Taxpayer Advocate Service. Study of Two-Year Bans on the Earned Income Tax Credit, Child Tax Credit, and American Opportunity Tax Credit A finding of fraud extends the ban to ten years.16Internal Revenue Service. Understanding Your CP79B Notice Either ban also blocks the Earned Income Tax Credit and the American Opportunity Tax Credit during the same period.