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Worth up to $2,000 per child — here's how to maximize this powerful tax benefit from the year your child is born.
The Child Tax Credit (CTC) is a dollar-for-dollar reduction in your federal tax bill — not just a deduction. For each qualifying child under 17, you can reduce your taxes by up to $2,000. Up to $1,700 is refundable, meaning you can get money back even if you owe no tax.
$2,000
Credit per Child
Under age 17
$1,700
Refundable Portion
Additional Child Tax Credit
$200K
Phase-out Starts
Single / $400K married
The credit reduces by $50 for every $1,000 of income above the threshold. For married filing jointly, the full credit is available up to $400,000 AGI.
Credit Amount by Income (Married Filing Jointly)
Credit Reduction = (AGI − Threshold) ÷ $1,000 × $50
Round up to the nearest $1,000 above the threshold
Age Test
Child must be under 17 at the end of the tax year
Relationship Test
Son, daughter, stepchild, foster child, sibling, or descendant
Residency Test
Child lived with you for more than half the year
Support Test
Child didn't provide more than half their own support
Citizenship
Must be U.S. citizen with valid SSN issued before return due date
Dependent
Must be claimed as a dependent on your return
Tax Benefits Comparison
| Feature | Child Tax Credit | CDCTC (Childcare) |
|---|---|---|
| Max Value | $2,000/child | $1,050/child |
| Refundable? | Partially ($1,700) | No |
| Income Limit | $400K (MFJ) | No limit |
| Requires Expenses? | No | Yes (childcare) |
| Age Limit | Under 17 | Under 13 |
Claim Full Credit
Even if born December 31st — no proration by birth date.
File Form 1040
Credit is automatic when you list qualifying children as dependents.
Last Year of CTC
Switches to $500 Other Dependent Credit.
ACTC Delay
Returns claiming ACTC are held until mid-February (PATH Act).
Pro Tip
Key Takeaways