Additional Child Tax Credit (ACTC)
The refundable portion of the Child Tax Credit, worth up to $1,700 per child for 2025 and 2026. Families who owe less tax than their CTC amount can receive the ACTC as a cash refund.
The Additional Child Tax Credit (ACTC) is the refundable component of the Child Tax Credit. When the Child Tax Credit exceeds a family's federal income tax liability, the ACTC allows them to receive some or all of the remaining credit as a direct refund from the IRS. For 2025 and 2026, up to $1,700 per qualifying child is refundable through the ACTC (the non-refundable portion is now up to $500 per child, since OBBBA raised the total CTC to $2,200).
The ACTC is calculated on Schedule 8812. Eligible families receive 15% of their earned income above $2,500, up to the maximum refundable amount per child. For a family with two children and $20,000 in earned income, the ACTC would be 15% × ($20,000 − $2,500) = $2,625, but no more than $3,400 (2 × $1,700). This formula ensures the credit provides the most benefit to working families with modest incomes.
Under the PATH Act (Protecting Americans from Tax Hikes), the IRS is required to hold refunds claiming the EITC or ACTC until mid-February, providing additional time to verify these claims and reduce fraud. Receiving the ACTC does not affect eligibility for federal benefits such as Medicaid, SNAP, or SSI. Taxpayers who have received an ITIN (Individual Taxpayer Identification Number) rather than a Social Security Number for qualifying children are not eligible for the ACTC.
How it works
The Additional Child Tax Credit is the refundable slice of the Child Tax Credit — up to $1,700 per qualifying child for 2025 and 2026, with the remaining nonrefundable portion of the credit capped at up to $500 per child now that OBBBA raised the total CTC to $2,200. When your Child Tax Credit is bigger than the federal tax you actually owe, the ACTC lets you get some or all of the difference back as a refund rather than losing it.
You calculate it on Schedule 8812: the ACTC equals 15% of your earned income above $2,500, capped at $1,700 multiplied by your number of qualifying children. This formula means the credit scales with how much you actually earned from work, so families with very low earned income get a smaller refundable amount even if they have several qualifying children.
Under the PATH Act, the IRS is required to hold refunds that include the ACTC or the Earned Income Tax Credit until mid-February, giving the agency extra time to verify the claims and reduce fraud — so filers claiming the ACTC shouldn't expect an early-season refund. Receiving the ACTC doesn't affect eligibility for other federal benefits like Medicaid, SNAP, or SSI, but a child who only has an ITIN rather than a Social Security number does not qualify a family for the ACTC.
Example: calculating the refundable ACTC amount
A family with two qualifying children has $22,000 of earned income for the year. The ACTC formula is 15% of earned income above $2,500: 15% × ($22,000 − $2,500) = 15% × $19,500 = $2,925.
The maximum possible ACTC for two children is $1,700 × 2, or $3,400. Since the calculated $2,925 is below that cap, the family's Additional Child Tax Credit is the full $2,925 — received as a refund even if it exceeds their actual tax liability.
Frequently asked questions
How is the Additional Child Tax Credit calculated?
Why is my refund delayed if I claim the Additional Child Tax Credit?
Can I claim the ACTC for a child who only has an ITIN?
Related Terms
Child Tax Credit
A tax credit worth up to $2,200 per qualifying child under age 17 for 2025 and 2026 (raised from $2,000 by OBBBA). Up to $1,700 is refundable as the Additional Child Tax Credit, meaning you can receive it even if you owe no tax.
Child Tax Credit
A federal tax credit of up to $2,200 per qualifying child under age 17 for 2025 and 2026 (raised from $2,000 by OBBBA). Up to $1,700 is refundable as the Additional Child Tax Credit, benefiting families with little or no tax liability.
Earned Income Credit (EITC)
A refundable tax credit for low- to moderate-income workers. The amount depends on income, filing status, and number of qualifying children — worth up to $8,046 in 2025 with three or more children.
Tax Refund
Money returned to you by the IRS when your total tax payments (withholding + estimated payments + refundable credits) exceed your tax liability for the year.