The Child Tax Credit is partially refundable, meaning you can receive money back even if you owe no tax

The Child Tax Credit reduces the federal income tax you owe, dollar for dollar. But part of it — called the Additional Child Tax Credit — can be refunded to you as money in your bank account, even if your tax bill is zero. This refundable portion is separate from the main credit and has its own rules about how much you can receive.

Whether you get a refund depends on your income, how many children you claim, and which tax year you are filing. The refundable amount has changed in recent years, so the rules that applied in 2021 are different from those in 2024.

Key Takeaways

  • The Child Tax Credit itself is not refundable, but a portion called the Additional Child Tax Credit can be refunded to you as cash.
  • The refundable portion for 2024 is limited to $1,700 per child, though this amount changes by tax year.
  • You must have earned income to claim the refundable portion — investment income or unemployment benefits do not count.
  • The refundable credit phases out at higher income levels, and the income threshold depends on your filing status.

How the refundable portion works

The main Child Tax Credit is worth up to $2,000 per child under age 17. This credit reduces your tax bill first. If the credit is larger than the tax you owe, the excess does not automatically come to you — it stops at zero.

The Additional Child Tax Credit is the mechanism that lets you receive the leftover amount. It is calculated separately and is limited by law. For the 2024 tax year, the refundable portion is the lesser of $1,700 per child or 15 percent of your earned income above $2,500. This means if you earned $10,000, your refundable credit would be capped at 15 percent of $7,500 ($2,500 subtracted from your earnings), which equals $1,125 — not the full $1,700.

You claim the refundable portion on Form 1040, Schedule 8812. The IRS uses this form to calculate whether you are owed a refund based on the Additional Child Tax Credit rules.

Income limits and phase-out thresholds

The refundable credit does not phase out based on income the way the main credit does. However, you must have earned income to claim it at all. Earned income includes wages, self-employment income, and taxable alimony. It does not include Social Security, unemployment benefits, investment income, or child support.

If your earned income is below $2,500 in a tax year, you cannot claim the refundable portion. The $2,500 floor applies regardless of your filing status or number of children.

The main Child Tax Credit (the non-refundable part) does phase out at higher incomes. For 2024, it begins to reduce if your modified adjusted gross income exceeds $400,000 for married couples filing jointly, $200,000 for single filers, and $200,000 for heads of household. The refundable portion is not subject to this phase-out, but you still need enough earned income to may have access to for it.

The difference between refundable and non-refundable credits

A non-refundable credit can only reduce your tax bill to zero. If you owe $500 in tax and claim a $2,000 credit, the credit wipes out your $500 bill, but you do not receive the remaining $1,500. The credit is "used up" and the excess disappears.

A refundable credit can reduce your tax bill below zero, which means the IRS sends you the difference. If you owe $500 and claim a $2,000 refundable credit, you pay zero tax and receive a $1,500 refund. The Additional Child Tax Credit works this way, but only up to the annual limit ($1,700 per child in 2024).

The main Child Tax Credit is non-refundable. The Additional Child Tax Credit is the refundable piece. Together, they can total up to $2,000 per child, but only $1,700 of that can come back to you as a refund in most years.

How the refund amount is calculated

The IRS calculates your refundable credit using this formula: take 15 percent of your earned income that exceeds $2,500, then cap it at $1,700 per child (for 2024). Whichever number is smaller is what you can receive as a refund.

Example: You earned $15,000 and have two children. Fifteen percent of ($15,000 − $2,500) = 15% × $12,500 = $1,875. Your cap is $1,700 per child, so $1,700 × 2 = $3,400. The smaller number is $1,875, so that is your refundable credit. If you owe $500 in tax, the credit covers that and you receive a $1,375 refund.

Another example: You earned $5,000 and have one child. Fifteen percent of ($5,000 − $2,500) = 15% × $2,500 = $375. Your cap is $1,700 per child. The smaller number is $375, so that is your refundable credit. If you owe no tax, you receive a $375 refund.

Changes to the refundable amount by tax year

The refundable portion of the Child Tax Credit has varied in recent years. In 2021, the limit was $1,600 per child. In 2022 and 2023, it returned to $1,700 per child. For 2024, it remains $1,700 per child. These amounts are set by Congress and can change when tax law is updated.

When you file your return, use the limit for the tax year you are reporting — not the current year. If you are filing your 2023 return in 2024, use the 2023 limit of $1,700. The IRS instructions on Form 1040 and Schedule 8812 will show the correct limit for the year you are filing.

Who can and cannot claim the refundable credit

You can claim the Additional Child Tax Credit if you have a may have access to child, earned income of at least $2,500, and a valid Social Security number for yourself and the child. The child must be under age 17 at the end of the tax year and claimed as your dependent.

You cannot claim it if your earned income is below $2,500, even if you have a large tax refund from withholding or other credits. You also cannot claim it if the child does not have a valid Social Security number or if you do not have one yourself. If you are a nonresident alien, you are generally not able to claim the refundable credit, though some exceptions exist depending on your visa status and tax treaty may be able to access.

Frequently Asked Questions

Can I get the full $2,000 Child Tax Credit as a refund?

No. The maximum refundable portion is $1,700 per child in 2024. The remaining $300 per child is non-refundable, meaning it can only reduce your tax bill, not create a refund. If you owe less tax than the full credit amount, you lose the excess.

What if I have no earned income but receive unemployment or Social Security?

Unemployment and Social Security do not count as earned income for the Additional Child Tax Credit. You must have wages, self-employment income, or taxable alimony to claim the refundable portion. If you have no earned income, you can still claim the non-refundable part of the credit to reduce your tax bill, but you will not receive a refund.

Do I need to file a tax return to get the refundable credit?

Yes. You must file Form 1040 and Schedule 8812 to claim the Additional Child Tax Credit. The IRS does not send refunds for credits you do not report on a return. Even if no tax is owed, filing is the only way to receive the refundable portion.

Does the refundable credit change if my income goes up?

The refundable credit is based on earned income above $2,500, calculated at 15 percent. Higher income means a higher refundable credit, up to the annual cap ($1,700 per child in 2024). Once you hit the cap, additional income does not increase the refund. The non-refundable part of the credit phases out at higher incomes, but the refundable part does not.

What if I claimed the child on my return but the child has no Social Security number?

The child must have a valid Social Security number to be claimed as a dependent and to generate a Child Tax Credit. Without one, you cannot claim the credit at all — refundable or non-refundable. If the child is a U.S. citizen or resident alien, you can explore for a Social Security number through the Social Security Administration before filing.