Additional Child Tax Credit

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Additional Child Tax Credit (ACTC)

Key takeaways

  • The ACTC is the refundable portion of the Child Tax Credit (CTC).
  • For tax years 2024 and 2025, up to $1,700 per qualifying child can be claimed as ACTC.
  • The CTC maximum is $2,000 per child; the refundable portion is limited and subject to income phaseouts.
  • Phaseouts begin at adjusted gross incomes (AGI) of $200,000 for single filers and $400,000 for married filing jointly.
  • Qualifying children must be claimed as dependents and meet age, residency, relationship, and Social Security number requirements.

What is the ACTC?

The Additional Child Tax Credit (ACTC) lets eligible taxpayers receive part of an unused Child Tax Credit as a refund. If the nonrefundable CTC reduces your tax liability but leaves unused credit, the ACTC may convert part of that unused amount into a refundable refund—subject to limits and eligibility rules.

How the credit works

  • The CTC can reduce federal income tax liability up to $2,000 per qualifying child (2024–2025).
  • If the CTC exceeds your tax liability, up to $1,700 per child of the unused credit can be refundable as the ACTC for 2024 and 2025.
  • The refundable amount is claimed by completing Schedule 8812 and filing it with Form 1040.
  • Example: If you have three qualifying children, up to $5,100 (3 × $1,700) could be refundable, depending on circumstances and limits.
  • The $2,000 and $1,700 amounts begin to phase out at AGIs of $200,000 (single) and $400,000 (married filing jointly).
  • You cannot claim the ACTC if you exclude foreign-earned income by filing IRS Form 2555.

Eligibility — qualifying child and taxpayer rules

To claim the CTC and potentially the ACTC, the dependent child must meet all of the following:
* Age — no older than 16 on the last day of the tax year (i.e., under 17).
* Relationship — son, daughter, stepchild, eligible foster child, sibling, step-sibling, or other qualifying relative who meets IRS rules.
* Residency — lived with you for more than half the tax year (with certain exceptions).
* Support — the child did not provide more than half of their own support.
* Citizenship — a U.S. citizen, U.S. national, or resident alien.
* Social Security — valid SSN issued before the due date of the tax return (including any extension to October if you filed for one).
* You must claim the child as a dependent on your tax return.

Special note: Recent IRS guidance (February 2025) expanded eligibility rules for Puerto Rico residents so some may qualify with one child where previously a higher threshold applied. Also, refunds that include the ACTC could not be issued before mid-February 2025 under the law in effect at that time.

How to claim

  • File Form 1040 and attach Schedule 8812 to calculate and claim the ACTC.
  • Ensure each qualifying child has a valid Social Security number issued before your return’s due date (or extended due date).

Legislative background (brief)

  • 1997 — The Child Tax Credit was created.
  • 2001 — The Additional Child Tax Credit was introduced to make part of the CTC refundable.
  • 2017 — The Tax Cuts and Jobs Act raised the CTC to $2,000 per child and set the current phaseout thresholds; those parameters remain in effect for 2024–2025.

Bottom line

The ACTC can turn unused Child Tax Credit into a refundable payment for many families, especially those with multiple qualifying children. Income phaseouts limit benefits for higher earners, but for eligible taxpayers the CTC and ACTC together can substantially reduce tax liability and increase refunds. Make sure qualifying children meet the age, residency, relationship, and Social Security requirements and file Schedule 8812 with Form 1040 to claim the refundable portion.