Child Tax Credit

The Child Tax Credit provides up to $2,200 per qualifying child under age 17 for tax years 2025 and 2026, a figure the One Big Beautiful Bill Act (OBBBA) raised from the prior $2,000 maximum and made permanent. To qualify, the child must be your dependent, a US citizen or resident, and have a valid Social Security number. The credit reduces your tax liability dollar for dollar, which makes it more valuable than an equivalent deduction, since a deduction only saves you your marginal tax rate on each dollar.

You claim the Child Tax Credit on your Form 1040 using the Schedule 8812 worksheet, which walks through the phase-out calculation and determines how much of the credit is refundable. Up to $1,700 of the credit is refundable through the Additional Child Tax Credit (ACTC), meaning a family with little or no tax liability can still receive that portion as a refund; the refundable amount is calculated as 15% of earned income above $2,500, so families with very low earned income may not receive the full refundable amount.

The credit begins phasing out at $200,000 of modified AGI for single filers and $400,000 for married filing jointly, reducing by $50 for every $1,000 of income above the threshold — high earners can lose the credit entirely well before their income seems unusually high in absolute terms. Dependents who don't qualify for the full CTC, like children 17 or older or a dependent parent, may still generate a separate $500 nonrefundable Credit for Other Dependents, which is easy to overlook if you assume only children under 17 count for anything.