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

The Child Tax Credit reduces the federal income tax you owe, dollar for dollar. But here is the key difference: you can receive part of it as a refund even if your tax bill is zero. In 2024, you can claim up to $2,000 per may have access to child under age 17. Of that amount, up to $1,700 is refundable — meaning the IRS will send it to you as a refund check or direct deposit if you have no tax liability to reduce.

The remaining $300 per child is non-refundable. That portion can only reduce your tax bill to zero; it cannot generate a refund. This matters most for lower-income families who owe little or no federal tax. Without the refundable portion, they would lose the credit entirely.

Whether you receive the full refundable amount depends on your income and how many children you claim. The IRS uses a formula to calculate the refundable part, and it phases out as your income rises.

Key Takeaways

  • Up to $1,700 of the $2,000 Child Tax Credit per child is refundable, meaning you can receive it as a refund even if you owe no tax.
  • The remaining $300 per child is non-refundable and can only reduce your tax bill to zero.
  • The refundable amount is calculated using a formula based on your earned income, and it phases out at higher income levels.
  • You must have a valid Social Security number for each child and meet income and relationship requirements to claim the credit.
  • The refundable portion is called the Additional Child Tax Credit and appears on Form 1040 as a separate line item.

How the refundable portion is calculated

The refundable part of the Child Tax Credit is officially called the Additional Child Tax Credit. The IRS calculates it by taking 15 percent of your earned income above $2,500 (this threshold does not change year to year). If that amount is less than $1,700 per child, you receive the smaller amount. If it exceeds $1,700 per child, you are capped at $1,700.

For example: if you earned $20,000 and have one child, your earned income above $2,500 is $17,500. Fifteen percent of $17,500 is $2,625. But the refundable credit maxes out at $1,700 per child, so you would receive $1,700 as a refund. If you earned $12,000 with one child, 15 percent of $9,500 is $1,425, so you would receive $1,425.

This formula means families with very low earned income may receive less than the full $1,700 refundable amount. Families with no earned income (for example, those receiving only Social Security or unemployment) cannot claim the refundable portion at all, though they may still claim the non-refundable $300 per child if they have other tax liability.

Who qualifies for the Child Tax Credit

To claim the Child Tax Credit — refundable or not — the child must be your dependent, under age 17 at the end of the tax year, and have a valid Social Security number. The child must also be your son, daughter, stepchild, foster child, sibling, or descendant of any of these (such as a niece or nephew), and must have lived with you for more than half the year.

Your income also matters. The credit begins to phase out at $400,000 of modified adjusted gross income for married couples filing jointly, and $200,000 for single filers. For each $1,000 (or fraction of $1,000) over these thresholds, the credit reduces by $50 per child.

You claim the Child Tax Credit on Form 1040, Schedule 8812 (if you are claiming the refundable portion). The IRS will calculate the refundable amount for you if you file electronically, or you can calculate it yourself using the worksheet in the Form 1040 instructions.

Refundable vs. non-refundable: what the difference means for your refund

A non-refundable credit is like a coupon that can only reduce what you owe. If your tax bill is $500 and you have a $1,000 non-refundable credit, the credit brings your bill to zero, but you do not receive the extra $500. The unused portion disappears.

A refundable credit works differently. If your tax bill is $500 and you have a $1,000 refundable credit, the credit first reduces your bill to zero, then the remaining $500 is sent to you as a refund. This is why the refundable portion of the Child Tax Credit is so valuable for low-income families — it can generate a refund even when they owe no tax.

The Child Tax Credit is unusual because it is partially refundable. Most credits are either fully refundable (like the Earned Income Tax Credit) or fully non-refundable (like the Lifetime Learning Credit). The Child Tax Credit splits the difference, giving you the benefit of both structures.

How the credit changed in recent years

The refundable portion of the Child Tax Credit has changed several times. In 2021 and 2022, the American Rescue Plan temporarily increased the refundable amount to $1,800 per child and lowered the income threshold to $2,000. These changes expired after 2022, and the credit returned to its previous structure in 2023.

For 2024 and beyond, the credit is $2,000 per child, with up to $1,700 refundable. Congress has proposed making the full $2,000 refundable, but that change has not been enacted. If you are filing a prior-year return, check the rules for that specific year, as the amounts and thresholds may differ.

The IRS publishes updated credit amounts and income thresholds each year in Publication 972. You can find this on the IRS website or request it by phone.

Common mistakes when claiming the refundable credit

The most common error is forgetting to claim the refundable portion at all. Many taxpayers claim the non-refundable $300 per child but do not complete Schedule 8812, which is where the Additional Child Tax Credit (the refundable part) is calculated. If you have low earned income and little or no tax liability, Schedule 8812 is where your refund comes from.

Another mistake is using the wrong Social Security number or spelling a child's name differently than it appears on their Social Security card. The IRS matches your return to the child's number, and mismatches can delay your refund or cause the credit to be denied.

A third error is claiming a child who does not meet the relationship or residency test. Foster children and stepchildren count, but the child must have lived with you for more than half the year. If you and your ex-spouse both claim the same child, the IRS will disallow the credit for one of you, and you may face a penalty.

Frequently Asked Questions

Can I get the full $1,700 refundable credit if I have no income?

No. The refundable portion is calculated as 15 percent of earned income above $2,500. If you have no earned income, you cannot claim the refundable portion, though you may still claim the non-refundable $300 per child if you have tax liability to reduce. Earned income includes wages, self-employment income, and some other sources, but not Social Security, unemployment, or investment income.

What if I claimed the credit in 2021 or 2022 and received more money than I do now?

The refundable amount was temporarily higher in those years due to the American Rescue Plan. In 2021 and 2022, up to $1,800 per child was refundable. Starting in 2023, it returned to $1,700. This is not an error on your current return — the law changed. If you received advance payments of the credit in 2021, you may have had to reconcile them on your 2021 return.

Do I have to file a tax return to get the refundable Child Tax Credit?

Yes. You must file Form 1040 (or 1040-SR if you are age 65 or older) to claim the credit. Even if you have no tax liability and would normally not need to file, filing is the only way to receive the refundable portion. The IRS does not send the refundable credit without a return.

What happens if the IRS denies my Child Tax Credit claim?

The IRS will send you a notice explaining why. Common reasons include a mismatched Social Security number, a child who does not meet the age or relationship test, or income above the phase-out threshold. You can respond to the notice with documentation (such as a birth certificate or lease showing residency) or request an appeal if you disagree.

Can I claim the Child Tax Credit for a child who is not a U.S. citizen?

The child must have a valid Social Security number to be claimed. This means the child must be a U.S. citizen, national, or resident alien. Children with Individual Taxpayer Identification Numbers (ITINs) do not may have access to for the Child Tax Credit, though they may may have access to for other credits.