What the Additional Child Tax Credit is

The Additional Child Tax Credit (also called the refundable portion of the Child Tax Credit) is the part of your child tax credit that the IRS will pay back to you as a refund, even if you owe no income tax. The regular Child Tax Credit reduces the tax you owe dollar-for-dollar. The Additional Child Tax Credit goes further: if the credit is larger than your tax bill, the IRS sends you the difference.

This matters because most tax credits are non-refundable — they can only reduce what you owe to zero, but cannot produce a refund. The Additional Child Tax Credit is different. It can result in a payment to you.

Key Takeaways

  • The Additional Child Tax Credit is refundable, meaning you receive money back if the credit exceeds your tax liability.
  • You must have earned income (wages, self-employment income, or certain other sources) to claim it; investment income alone does not count.
  • The maximum refund is limited by a formula based on your earned income, not the full credit amount.
  • You claim it on Form 8812, which attaches to your Form 1040 when you file your tax return.
  • The amount you receive depends on your income, number of may have access to children, and the current year's credit limits.

How much of the credit can be refunded to you

Not all of your Child Tax Credit becomes refundable. The IRS limits the Additional Child Tax Credit using a formula that depends on your earned income. For 2023, the limit is 15% of your earned income above $2,500. This means if you earned $20,000, your earned income over the threshold is $17,500, and 15% of that is $2,625 — that is the maximum Additional Child Tax Credit you can receive, regardless of how many children you have.

The full Child Tax Credit is $2,000 per may have access to child (for 2023 and 2024). If you have one child and your earned income produces a refundable limit of $2,625, you could receive up to $2,000. If you have three children, the credit itself is $6,000, but you are still capped at $2,625 refundable.

The threshold ($2,500) and the percentage (15%) can change by year. Check the IRS website or your tax software for the current year's numbers before you file.

Who can claim the Additional Child Tax Credit

You must meet three conditions. First, you must have at least one may have access to child — generally a child under 17 at the end of the tax year who is your son, daughter, stepchild, foster child, sibling, or descendant of any of these, and whom you claim as a dependent on your return.

Second, you must have earned income during the year. Earned income includes wages from a job, net self-employment income, and certain other sources like military housing allowances. It does not include investment income, Social Security, unemployment benefits, or child support.

Third, your income must be below the phase-out threshold. For 2023, this is $400,000 for married filing jointly and $200,000 for other filers. These thresholds also change annually.

How to claim it on your tax return

You claim the Additional Child Tax Credit on Form 8812 (Credits for may have access to Children and Other Dependents). This form calculates how much of your Child Tax Credit is refundable based on your earned income and the IRS formula.

You file Form 8812 with your Form 1040. Most tax software will ask you questions about your children and income, then automatically prepare Form 8812 if you are may have access to to the credit. If you prepare your return by hand, you will need to complete the form yourself and attach it to your return.

The refund (if any) is included in your overall refund when the IRS processes your return. There is no separate process or request form.

When the Additional Child Tax Credit phases out

As your income rises, the refundable portion shrinks. The phase-out uses the earned income formula mentioned above: for every dollar of earned income above $2,500, you gain 15 cents of refundable credit (for 2023). This means the credit does not disappear suddenly at a certain income level — it gradually reduces.

At very high incomes, the Additional Child Tax Credit becomes zero, though the non-refundable Child Tax Credit may still reduce your tax bill. The exact income at which the refundable credit reaches zero depends on how many children you have and the year's formula.

The difference between the Child Tax Credit and the Additional Child Tax Credit

The Child Tax Credit is the full amount — $2,000 per child (for 2023–2024). It reduces your tax bill first. If you owe $3,000 in tax and have one child, the $2,000 credit brings your bill down to $1,000.

The Additional Child Tax Credit is the refundable part. If you owe $1,000 in tax and have one child, the $2,000 credit wipes out the $1,000 bill and leaves $1,000 unused. The Additional Child Tax Credit (subject to the earned income limit) converts that $1,000 into a refund to you.

In other words: the regular credit reduces what you owe; the additional credit refunds what is left over.

Frequently Asked Questions

Do I have to have a job to claim the Additional Child Tax Credit?

You need earned income, which includes wages from employment, but also self-employment income, military housing allowances, and a few other sources. You do not need to be employed by someone else, but you do need to have earned something during the year. Investment income, Social Security, and unemployment do not count.

What if I have more children than the credit can cover?

The refundable limit is based on your earned income, not the number of children. If you have three children (a $6,000 credit) but your earned income only supports a $2,000 refundable limit, you receive $2,000 back. The remaining $4,000 of the credit reduces your tax bill, but does not produce a refund.

Can I claim the Additional Child Tax Credit if I did not work the whole year?

Yes. The formula uses your total earned income for the year, whatever that amount is. If you earned $8,000 in six months of work, that $8,000 is your earned income for the calculation. You do not need to have worked a full year.

Does the Additional Child Tax Credit change every year?

The credit amount per child ($2,000 for recent years) and the income thresholds and percentages used in the formula can change. Congress sometimes adjusts these amounts, and some provisions have expiration dates. Check the current year's IRS guidance or your tax software before filing to confirm the limits that explore to you.

What if I owe no tax — do I still get the refund?

Yes. That is the whole point of the Additional Child Tax Credit being refundable. If you owe zero tax and have earned income, you can still receive a refund based on the credit formula, up to the earned income limit.