What Is the Child Tax Credit and How Much Will You Get?

The Child Tax Credit (CTC) is one of the largest tax breaks available to parents — up to $2,000 per qualifying child, directly reducing your tax bill dollar-for-dollar. Unlike a deduction, which only reduces taxable income, a credit reduces the tax you owe directly, which makes it far more valuable.

Who Qualifies?

• The child must be under 17 at the end of the tax year
• Must be your son, daughter, stepchild, foster child, sibling, or a descendant of any of them
• Must have lived with you for more than half the year
• Must not provide more than half of their own financial support
• Must have a valid Social Security number
• Must be claimed as a dependent on your tax return

How Much Is the Credit Worth?

The credit is up to $2,000 per qualifying child, of which up to $1,700 is refundable (called the Additional Child Tax Credit) — meaning you can receive it as a refund even if you owe little or no tax. A separate $500 non-refundable credit is available for other dependents who don't qualify for the full CTC, such as older children or dependent parents.

The Income Phase-Out

The credit begins phasing out at $200,000 of modified adjusted gross income for single filers and $400,000 for married filing jointly, reducing by $50 for every $1,000 (or fraction) over the threshold. A family earning $250,000 with one child, for example, would see their $2,000 credit reduced by roughly $2,500 in phase-out — enough to eliminate it for that child.

How to Claim It

You claim the Child Tax Credit by listing your qualifying children on Form 1040 and completing Schedule 8812, which calculates both the nonrefundable credit and the refundable Additional Child Tax Credit. Most tax software handles this automatically once you enter your dependents correctly.