1. The Credit Most Families Build Refunds On
The Child Tax Credit is worth up to **$2,200 per qualifying child under 17** — with up to **$1,700 per child refundable** as the Additional Child Tax Credit (ACTC), meaning part of it can arrive as a refund even if you owe no income tax. Amounts are for 2025-2026 and index in later years.
2. The Child Has to Qualify — All Seven Tests
1. **Age** — under 17 at year-end 2. **Relationship** — your child, stepchild, foster child, sibling, or a descendant of any of them 3. **Dependence** — claimed as your dependent 4. **Residency** — lived with you more than half the year 5. **Support** — did not provide more than half of their own support 6. **Citizenship** — U.S. citizen, national, or resident alien with a valid SSN issued by the return's due date 7. **The child's SSN** must be valid for employment
3. The Taxpayer Has to Qualify Too
- **Income phase-out:** the credit shrinks by $50 for every $1,000 of MAGI over **$200,000** (single/head of household) or **$400,000** (joint) - **SSN requirement starting 2026:** the claiming taxpayer must generally have a valid SSN; on a joint return, at least one spouse must When both the child and taxpayer tests pass, the credit is claimed on Schedule 8812. When a dependent fails the CTC tests — say, a 19-year-old, or a parent you support — the **$500 Credit for Other Dependents** may still apply.
4. The Refundable Part: ACTC
The ACTC is what makes the CTC powerful for lower-income families. The refundable portion is earned-income based: broadly, **15% of earned income above $2,500**, up to the $1,700-per-child cap. Earned income includes net self-employment earnings — a gig worker with two kids and modest profit can have a refundable credit built on Schedule C income. The calculation happens on Schedule 8812. **Timing:** refunds tied to the ACTC are legally held until mid-February — details in EITC and ACTC refund timing.
5. Where Families Get It Wrong
- Claiming a child who did not live with them the required months — the question preparers are *required* to ask, covered in preparer due diligence - Divorced parents both claiming the same child — only one return can; tie-breaker rules apply - Missing the age cliff — a child who turns 17 in December qualifies for $0, while a 17th birthday in January costs nothing that year - Assuming the credit pays against self-employment tax — it does not; see our self-employment tax explained article for how the two separate bills interact For the full families picture — dependent care, education credits, head of household — see our families services page or book a consultation. This article is general information for 2025-2026, not tax advice. Amounts index annually — verify current figures on irs.gov.