Federal Child Tax Credit
and Additional Child Tax Credit
- AN OVERVIEW -
For more information, click on the questions below:
The Child Tax Credit (CTC) is a federal tax credit for low and moderate income families with dependent children under age 17. The purpose of the Child Tax Credit is to lower the tax burden of families who are raising children. The maximum CTC is $1000 per qualifying child.
The Child Tax Credit is a nonrefundable credit, meaning that the amount of the credit is limited to the amount of taxes a family owes. Families who do not pay any taxes, or whose CTC is more than they owe in taxes, cannot get the full credit unless they qualify for the Additional Child Tax Credit (ACTC)
The Additional Child Tax Credit is a refundable tax credit that allows families who don't owe any taxes, or owe less than their CTC amount, to get a refund payment from the government.
Note: The Child Tax Credit should not be confused with the Child and Dependent Care credit. While the Child Tax Credit is available to most low and moderate income families with dependent children, the Child and Dependent Care credit is only for working families who pay someone else to care for their children or other dependents so that they can work.
To be eligible for the Child Tax Credit (CTC), you must have at least one dependent child who was younger than 17 at the end of the tax year. The child must also meet relationship, residency, and other requirements to be a qualifying child.
You must owe federal taxes to be eligible for the Child Tax Credit. The CTC lowers your taxes dollar for dollar and is not refundable; therefore you cannot get the credit if your tax liability is zero. In addition, since the CTC phases out as income increases above certain thresholds, you are eligible for the credit only if your income is not too high.
If you cannot get the full Child Tax Credit because you do not owe enough in taxes, you may be eligible for the Additional Child Tax Credit (ACTC). To get the ACTC, you must have more than $3000 of earned income, or meet the special rules for families with three or more qualifying children. The Additional Child Tax Credit is a refundable credit that allows you to get a refund payment from the government for all or part of your unused CTC.
The maximum Child Tax Credit (CTC) is $1000 per qualifying child. The credit begins to phase out if your family's adjusted gross income is greater than $110,000 (married filing jointly), $75,000 (single), or $55,000 (married filing separately). The credit is reduced by 5% of the adjusted gross income over these amounts.
The Child Tax Credit is not refundable, so you cannot claim a larger credit than the amount of taxes you owe. However, if you are eligible for the refundable Additional Child Tax Credit, you may be able to get a refund payment for all or part of your unused CTC.
The Additional Child Tax Credit equals the unused portion of your CTC, but not more than 15% of your family's earned income over $3000. Special rules apply to families with three or more qualifying children.
To claim the Child Tax Credit (CTC), you must file a federal income tax return with the Internal Revenue Service (IRS). You must file Form 1040, Form 1040A, or Form 1040NR, not Form 1040EZ. If you are claiming the Additional Child Tax Credit to get a refund payment, you must attach Schedule 8812 - Additional Child Tax Credit.
You can get the forms you need from:
You can get free help with your tax return at a Volunteer Income Tax Assistance (VITA) or Tax Credit for the Elderly (TCE) site in your community.
Links to other web sites with additional information about the Child Tax Credit.