How the Child Tax Credit works in 2025
Under current law (the Tax Cuts and Jobs Act of 2017, extended by the American Rescue Plan and subsequent legislation), the Child Tax Credit provides up to $2,000 per qualifying child under age 17. Up to $1,700 of the per-child credit is refundable through the Additional Child Tax Credit (ACTC), meaning families with little or no federal tax liability can still receive a refund.
Qualifying child — five tests
- Age — Under 17 at the end of the tax year.
- Relationship — Son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of them.
- Support — The child did not provide more than half of their own support.
- Dependent — The child is claimed as your dependent.
- Residency — The child lived with you for more than half the year.
The income phase-out
The credit begins to phase out when modified AGI exceeds $200,000 for single filers and $400,000 for married filing jointly. The phase-out is $50 per $1,000 of MAGI above the threshold — a relatively gentle reduction that preserves most of the credit until income is well above the threshold.
The refundable portion (ACTC)
If your tax liability is too low to use the full $2,000 per child, you may qualify for the Additional Child Tax Credit. For 2025, up to $1,700 per child is refundable. The ACTC is computed on Form 8812 and requires earned income of at least $2,500. Families with no earned income do not qualify for the refundable portion.
For the full mechanics — including the earned income formula and the SSN requirement that took effect in 2025 — see our 2025 Child Tax Credit guide.