What Is the Child Tax Credit?
The Child Tax Credit (CTC) is a non-refundable federal tax credit of up to $2,000 per qualifying child under age 17. Up to $1,700 of it is refundable as the Additional Child Tax Credit (ACTC).
2025 Child Tax Credit Amounts
| Credit | Amount |
|---|---|
| Child Tax Credit (per child) | $2,000 |
| Refundable portion (ACTC) | Up to $1,700 |
| Income phase-out begins | $200,000 (single) / $400,000 (married) |
| Phase-out rate | $50 per $1,000 over threshold |
Who Is a Qualifying Child?
A qualifying child for the CTC must:
- Be under age 17 at the end of the tax year
- Have a valid Social Security Number (ITIN doesn’t qualify)
- Be your dependent (child, stepchild, foster child, sibling, or descendant)
- Have lived with you for more than half the year
- Not provide more than half their own support
How It Reduces Your Tax
The CTC is a non-refundable credit — it reduces your tax liability dollar-for-dollar. If you owe $3,000 in federal tax and have two qualifying children, the $4,000 credit reduces your tax to $0. The remaining $1,000 can be refunded as the Additional Child Tax Credit (up to $1,700 refundable per child).
How to Claim
File Schedule 8812 (Credits for Qualifying Children and Other Dependents) with your Form 1040. Your tax software will complete this automatically if you enter your dependents’ information correctly.
Impact on Take-Home Pay
If you claim the CTC on your W-4 (Step 3), your employer will reduce withholding by $2,000 per child per year — effectively giving you larger paychecks throughout the year. See our Paycheck Calculator to see how dependents change your estimated take-home pay.