Child Tax Credit

The Child Tax Credit (CTC) is a federal tax benefit for taxpayers with qualifying children under age 17 at the end of the tax year. For the 2023 tax year, the credit is $2,000 per qualifying child. The credit reduces your federal income tax liability dollar for dollar; part of it may be refundable through the Additional Child Tax Credit (ACTC).

Key takeaways

• Credit amount (2023): $2,000 per qualifying child.
• Income thresholds for the full credit: up to $200,000 for single filers or $400,000 for joint filers; the credit phases out above those levels.
• Refundability (ACTC): up to $1,600 refundable in 2023; increases to $1,700 in 2024.
• To claim the credit you must file Form 1040 and attach Schedule 8812.
• Each qualifying child must have a Social Security number.

Who qualifies

A dependent generally qualifies if all of the following apply:
* Under age 17 at the end of the tax year.
Is a son, daughter, stepchild, foster child, sibling, stepsibling, half‑sibling, or a descendant of any of those.
Lived with the taxpayer for more than half the year.
Did not provide more than half of their own support.
Is claimed as a dependent on the taxpayer’s return.
Has a valid Social Security number by the due date of the return.
Is a U.S. citizen, U.S. national, or resident alien.
Only one taxpayer may claim the CTC for any given child. A child who files a joint return generally cannot be claimed unless the joint return was only to claim a refund.

How the credit works

• The CTC reduces your tax liability directly.
• If the credit exceeds your tax liability, you may be eligible for the ACTC, which provides a refundable payment up to the refundable limit for the year.
• Claim the credit by filing Form 1040 and completing Schedule 8812 (Credits for Qualifying Children and Other Dependents), which calculates the CTC/ACTC amount.

Income limits and phaseout

• Full credit: single filers with modified adjusted gross income (MAGI) up to $200,000; married filing jointly up to $400,000.
• Above those thresholds the credit phases out; higher‑income taxpayers may receive a reduced amount or none.

Filing and practical tips

• Even low‑income households that owe no federal income tax should file a return to claim the refundable portion of the credit.
• Ensure each qualifying child has a valid Social Security number by the return due date.
• Use the IRS online tools or consult a tax preparer if you’re unsure whether a child qualifies.

Policy and poverty impacts

Temporary expansions of the CTC during the COVID‑19 pandemic (2021) increased credit amounts, made the credit fully or more refundable, and included advance payments. Research credited the expanded benefits with substantial reductions in monthly child poverty. Those emergency provisions have largely expired and the credit reverted to pre‑2021 rules, but debates over expansion, cost, and program design continue.

Bottom line

The Child Tax Credit provides substantial tax relief to families with qualifying children. To receive it, file a federal income tax return, include Schedule 8812, and make sure each claimed child meets the relationship, age, residency, support, and Social Security number requirements. For 2023 the credit is $2,000 per child, with up to $1,600 of that refundable (rising to $1,700 in 2024) through the Additional Child Tax Credit.