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The child tax credit is a federal tax benefit that plays an important role in providing financial support for American taxpayers with children. People with kids under the age of 17 may be eligible to claim a tax credit of up to $2,000 per qualifying dependent. For 2023, $1,600 of the credit is potentially refundable.
We’ll cover who qualifies, how to claim it and how much you might receive per child.
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What is the child tax credit?
The child tax credit (CTC) is a nonrefundable tax credit available to taxpayers with dependent children under the age of 17. The credit can reduce your tax bill on a dollar-for-dollar basis, potentially eliminating your tax bill altogether. Some taxpayers may also be eligible for a partial refund of the credit through what's called the “additional child tax credit" (ACTC).
To qualify, taxpayers and their children must meet certain eligibility criteria that take into account the child's age, as well as their relationship to the person claiming them.
Taxpayers must also meet income thresholds to take full advantage of the benefit because the credit phases out for high earners. Once your modified adjusted gross income exceeds the income limit, the credit amount you get may be smaller, or you may be deemed ineligible.
How much is the 2023 child tax credit?
Child tax credit 2023 (taxes filed in 2024)
For 2023, the child tax credit is worth $2,000 per qualifying dependent child if your modified adjusted gross income is $400,000 or below (married filing jointly) or $200,000 or below (all other filers). The refundable portion, also known as the additional child tax credit, is worth up to $1,600.
If your MAGI exceeds the above limits, your credit gets reduced by $50 for each $1,000 that your income exceeds the threshold.
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Child tax credit 2024
If you're curious about how this tax benefit will change in future years, it's possible to take a look ahead. For the 2024 tax year (tax returns filed in 2025), the child tax credit will be worth $2,000 per qualifying child, with $1,700 being potentially refundable through the additional child tax credit.
Requirements: Who qualifies for the child tax credit?
Taxpayers can claim the child tax credit for the 2023 tax year when they file their tax returns in 2024. Generally, there are seven “tests” you and your qualifying child need to pass.
Age: Your child must have been under the age of 17 at the end of 2023.
Relationship: The child you’re claiming must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister or a descendant of any of those people (e.g., a grandchild, niece or nephew).
Dependent status: You must be able to properly claim the child as a dependent. The child also cannot file a joint tax return, unless they file it to claim a refund of withheld income taxes or estimated taxes paid.
Residency: The child you’re claiming must have lived with you for at least half the year (there are some exceptions to this rule).
Financial support: You must have provided at least half of the child’s support during the last year. In other words, if your qualified child financially supported themselves for more than six months, they’re likely considered not qualified.
Citizenship: Per the IRS, your child must be a "U.S. citizen, U.S. national or U.S. resident alien," and must hold a valid Social Security number.
Income: Parents or caregivers claiming the credit also typically can’t exceed certain income requirements. Depending on how much your income exceeds that threshold, the credit gets incrementally reduced until it is eliminated.
Additional child tax credit
If you qualify for the CTC but can't take full advantage because you don't owe taxes or owe less than your credit amount, you may be able to get a partial refund by claiming the additional child tax credit.
To claim the ACTC, all of the above income and dependent criteria must be met, but there are also a few more rules:
You must either have an earned income of at least $2,500 or have three or more qualifying dependents. Earned income typically means money from jobs or self-employment. It does not include money from passive sources such as dividends, pensions, welfare or unemployment.
You or your partner (if married filing jointly) cannot exclude foreign-earned income from your taxes by filing Form 2555 or Form 2555-EZ.
The IRS figures your additional child tax credit amount by multiplying your earned income above $2,500 by 15%. You can claim that number or however much of the CTC credit you were entitled to but couldn’t fully use, whichever number is less. But keep in mind that the maximum refund you can get for the 2023 tax year is capped at $1,600 per qualifying dependent.
If you have three or more dependent children, the math can be more complex. See Schedule 8812 for more details.
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How to claim the 2023 child tax credit
For tax year 2023, you can claim the child tax credit and the additional child tax credit on the federal tax return (Form 1040 or 1040-SR) that you file by April 15, 2024, or by October 2024, with a tax extension. You’ll also need to fill out Schedule 8812 (“Credits for Qualifying Children and Other Dependents”), which is submitted with your 1040. This schedule will help you to figure out your child tax credit amount and how much of the partial refund you may be able to claim if applicable.
Most quality tax software guides you through claiming the child tax credit with a series of interview questions, simplifying the process and even auto-filling the forms on your behalf. If your income falls below a certain threshold, you might also be able to get free tax software through IRS’ Free File.
» MORE: Additional options for free tax filing
When to expect your child tax credit refund
Heads up early filers: By law, the IRS can't release a refund for a return claiming the child tax credit until mid-February, but generally speaking filers who use direct deposit as their refund method, e-file, and submit an error-free return, should see refunds hit their account within the normal timeframe for refund turnarounds — three weeks after submission.
If you file by paper, the wait times generally increase. The agency's "Where's My Refund" tool can also help you get of sense of what's going on with your funds.
» Curious about what other credits you may qualify for? Here's a list of 20 common tax deductions and breaks
Consequences of a child tax credit error
An error on your tax form can mean delays on your refund or on the child tax credit part of your refund. In some cases, it can also mean the IRS could deny the entire credit.
If the IRS denies your CTC claim:
You must pay back any CTC amount you’ve been paid in error, plus interest.
You might need to file Form 8862, "Information To Claim Certain Credits After Disallowance," before you can claim the CTC again.
If the IRS determines that your claim for the credit is erroneous, you may be on the hook for a penalty of up to 20% of the credit amount claimed.
State child tax credits
In addition to the federal child tax credit, a few states, including California, Colorado, and New York, also offer their own state-level CTCs that you may be able to claim when filing your state return. Visit your state's department of taxation website for more details.
» MORE: Explore other tax credits for people with kids
Child tax credit vs. child and dependent care credit
Although similar sounding, the child tax credit and the child and dependent care credit are not the same thing. The child tax credit is a tax incentive for people with children, while the child and dependent care credit is another tax credit for working parents or caretakers designed to help offset expenses such as day camp or after-school care. Both credits have different rules and qualifications.
What is the $500 credit for other dependents (ODC)?
If your child or a relative you care for doesn't quite meet the criteria for the CTC but you are able to claim them as a dependent, you may be eligible for a $500 nonrefundable credit called the "credit for other dependents." The IRS has a tool that can help you to determine if your dependent qualifies.
History of the child tax credit
Like other tax credits, the CTC has seen its share of changes throughout the years. In 2017, the Tax Cuts and Jobs Act, or TCJA, established specific parameters for claiming the credit that will be effective from 2018 through 2025. However, the American Rescue Plan Act of 2021 (the coronavirus relief bill) temporarily modified the credit for the 2021 tax year, which has caused some confusion as to which changes are permanent.
Here's a brief timeline of its history.
1997: First introduced as a $500 nonrefundable credit by the Taxpayer Relief Act.
2001: Credit increased to $1,000 per dependent and made partially refundable by the Economic Growth and Tax Relief Reconciliation Act.
2017: The TCJA made several changes to the credit, effective from 2018 through 2025. This included increasing the credit ceiling to $2,000 per dependent, establishing a new income threshold to qualify and ensuring that the partially refundable portion of the credit gets adjusted for inflation each tax year.
2021: The American Rescue Plan Act made several temporary modifications to the credit for the 2021 tax year only. This included expanding the credit to a maximum of $3,600 per qualifying child, allowing 17-year-olds to qualify, and making the credit fully refundable. And for the first time in U.S. history, many taxpayers also received half of the credit as advance monthly payments from July through December 2021.
2022–2025: The 2021 ARPA enhancements ended, and the credit reverted back to the rules established by the TCJA — including the $2,000 cap for each qualifying child. The refundable portion is adjusted each year to account for inflation.
Frequently asked questions
How much is the child tax credit worth?
For the 2023 tax year (returns filed in 2024), the child tax credit is worth up to $2,000 per qualifying dependent. The credit is also partially refundable through the additional child tax credit, meaning some taxpayers may be able to receive a tax refund for any excess amount up to a maximum of $1,600.
Is the child tax credit taxable?
No. It is a nonrefundable tax credit. This means that it can lower your tax bill by the credit amount. You may be able to get a portion of the credit back in the form of a refund through a partially refundable credit called the additional child tax credit.
Will there be a stimulus-style update for the child tax credit in 2023?
The American Rescue Plan Act made several temporary modifications to the credit for 2021 by increasing the benefit up to $3,600 per dependent and issuing advance payments from July through December 2021.
Despite general public support for the restoration of this modified benefit, these pandemic-era enhancements have not been carried over for this tax year.
Is the child tax credit the same thing as the child and dependent care credit?
No. This is another type of tax benefit for taxpayers with children or qualifying dependents. The child and dependent care credit covers a percentage of expenses you made for care — such as day care, certain types of camp or babysitters — so that you can work or look for work.
As a tax expert with a deep understanding of the U.S. tax system, I can confidently provide detailed insights into the concepts covered in the article.
Child Tax Credit Overview: The Child Tax Credit (CTC) is a federal tax benefit designed to provide financial support to American taxpayers with dependent children under the age of 17. The credit can significantly reduce a taxpayer's overall tax liability on a dollar-for-dollar basis, potentially eliminating the tax bill entirely.
Qualifications for the Child Tax Credit: To qualify for the Child Tax Credit for the 2023 tax year (filed in 2024), taxpayers and their children must meet specific eligibility criteria, including:
- Age: The child must be under 17 years old at the end of the tax year.
- Relationship: The qualifying child can be a son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant (e.g., grandchild, niece, or nephew).
- Dependent Status: The taxpayer must be able to claim the child as a dependent, and the child cannot file a joint tax return.
- Residency: The child must have lived with the taxpayer for at least half of the year.
- Financial Support: The taxpayer must have provided at least half of the child's support during the last year.
- Citizenship: The child must be a U.S. citizen, U.S. national, or U.S. resident alien with a valid Social Security number.
- Income: There are income thresholds, and the credit phases out for high earners.
Child Tax Credit Amounts for 2023: For the 2023 tax year, the Child Tax Credit is worth $2,000 per qualifying dependent child. The credit is partially refundable, known as the Additional Child Tax Credit (ACTC), with a potential refund of up to $1,600. The credit amount is subject to reduction if the taxpayer's modified adjusted gross income exceeds specific limits.
Claiming the Child Tax Credit: To claim the Child Tax Credit for the 2023 tax year, taxpayers need to file their federal tax return (Form 1040 or 1040-SR) by April 15, 2024, or by October 2024 with a tax extension. Schedule 8812, "Credits for Qualifying Children and Other Dependents," must be filled out to determine the credit amount and any potential partial refund.
Additional Child Tax Credit (ACTC): If taxpayers qualify for the CTC but can't fully utilize it due to low or no tax liability, they may be eligible for the Additional Child Tax Credit. To claim the ACTC, taxpayers must meet specific criteria, including having earned income of at least $2,500 or having three or more qualifying dependents.
Child Tax Credit History: The article provides a historical timeline of the Child Tax Credit, highlighting key changes such as the initial introduction in 1997, increases in 2001, modifications by the Tax Cuts and Jobs Act in 2017, and temporary changes in 2021 under the American Rescue Plan Act.
FAQs and Other Considerations: The article addresses common questions about the Child Tax Credit, including its worth, taxability, and the absence of a stimulus-style update for 2023. It also distinguishes the Child Tax Credit from the Child and Dependent Care Credit and mentions the $500 credit for other dependents.
As an expert, I can emphasize the importance of accurate filing to avoid delays, errors, or potential penalties associated with Child Tax Credit claims. Additionally, I can provide guidance on state-specific Child Tax Credits and related credits for taxpayers with children.
