What Is the Child Tax Credit and How Does It Work?

The Child Tax Credit is a nonrefundable credit that can help reduce the amount of federal income tax you owe if you're an eligible taxpayer with qualifying children. Because the CTC is a tax credit—not a tax deduction—it reduces your total tax liability dollar for dollar.  

For 2025 and 2026, the maximum credit amount per qualifying child is $2,200. Your exact credit amount per qualifying child will depend on your income and overall tax situation. If the credit reduces your tax bill to zero or you don't owe taxes for the year, you may still be able to receive part of the full credit amount through the Additional Child Tax Credit (ACTC). 

Based on Internal Revenue Service (IRS) rules, you (or your spouse, if you're married filing jointly) must have a valid Social Security number (SSN) to claim the Child Tax Credit on your tax return. You must also meet these eligibility requirements. 

• Child ages: Each child you claim must be under age 17 at the end of the tax year.
• Parent or guardian relationship: They must be your adopted or biological daughter or son, stepchild, eligible foster child, sister, brother, stepsister, stepbrother, half-sister, half-brother, or a descendant of one of these, such as your grandchild, niece, or nephew.
• Residence: In general, the child must have lived with you for more than half the tax year, which can include temporary absences, such as a vacation, school, or hospital stay. The IRS allows for some exceptions to this 6-month rule, such as in the case of divorce or a child's birth or death.
• Financial support: The child must not have provided more than half of their own financial support for the tax year or filed a joint return for the tax year (unless the joint return was for a refund of taxes withheld or estimated taxes).
• Dependent status: You must list the child as a dependent on your tax return.
• Income: To qualify for the full credit amount, your modified adjusted gross income (MAGI) must not be over the phase-out threshold of $200,000 ($400,000 for joint filers).
• Child citizenship: Each child you claim must also have a valid Social Security number and be a U.S. citizen, U.S. national, or U.S. resident alien. 

Let's say you make $80,000 a year and have two children under age 17. You could qualify for the maximum credit amount and receive up to $4,400 (2 x $2,200). If you have three qualifying children, the full credit would be $6,600 (3 x $2,200).  

Not all eligible taxpayers will receive the full amount. The credit begins to phase out once your modified adjusted gross income (MAGI) exceeds $200,000 for single filers and $400,000 for married couples. If your income is over this amount, your tax benefit will be reduced by $50 for every additional $1,000 of income, until it phases out completely.

The table below shows the income levels at which the Child Tax Credit phases out completely, based on your filing status and the number of qualifying children.  

Assuming you meet all taxpayer eligibility requirements, you can claim the Child Tax Credit when you file your federal income tax return. 

To do so, you'll need to enter each qualifying child on your Form 1040 and attach a completed Schedule 8812: Credits for Qualifying Children and Other Dependents. The IRS will use the information you report on Schedule 8812 to determine your eligibility, calculate your credit amount, and apply income phase‑out rules based on your tax filing status. 

Before you file, you can also use the IRS's Interactive Tax Assistant to determine eligibility for you and your children.  

Along with other tax breaks and strategies, the Child Tax Credit can help reduce your overall tax burden and potentially increase your tax refund amount, if you're getting one. To make more informed tax decisions all year long, take time to understand the credit's eligibility requirements, maximum credit amounts, and income thresholds.  

Shifts in tax laws, your income, filing status, and overall financial situation can change your eligibility and tax planning needs. For the best potential outcome and to develop a more personalized strategy, consider talking with a tax professional or financial advisor.