Everything About Child Tax Credit (CTC): Updated for 2026

The Child Tax Credit (CTC) for 2026 has been increased to $2,200 per qualifying child under age 17, up from $2,000, following the passage of the One Big Beautiful Bill Act (OBBBA) enacted on July 4, 2025. The refundable portion, the Additional Child Tax Credit (ACTC), remains at $1,700 per child, with a minimum earned income requirement of $2,500. The credit begins to phase out at $200,000 MAGI for single filers and $400,000 for married filing jointly. Starting in 2027, the full credit amount will be indexed for inflation. File using Form 1040 with Schedule 8812 attached to claim the credit.

Key Summary

• How much is the Child Tax Credit for 2026? Up to $2,200 per qualifying child under age 17.
• What is the refundable portion (ACTC) for 2026? Up to $1,700 per qualifying child, if you have earned income of at least $2,500.
• At what income does the CTC start to phase out? At $200,000 MAGI for single filers and $400,000 for married filing jointly. The credit reduces by $50 for every $1,000 above the threshold.
• What form is used to claim the CTC? Form 1040, with Schedule 8812 attached.
• Is the CTC now permanent? Yes. The OBBBA made the expanded CTC permanent from 2025 onward.

Raising a child can be expensive. Various studies have found that the cost of raising a child can reach $200,000 or more, and taxpayers with children need to be well aware of its consequences on their tax bills. The Child Tax Credit is one of the most significant tax benefits available to American families and one of the most commonly misunderstood. Taxpayers with children must know exactly how to qualify for it, how much they can claim, and how to file accurately.

History of Child Tax Credit

The American government devised this tax credit to help families better care for their children. However, earlier versions of the credit were limited in scope. At one point, the CTC was available only to families with three or more children, and the credit amounts were significantly lower than they are today.

Several amendments have been made over the years. The most recent and significant change came through the One Big Beautiful Bill Act (OBBBA), enacted on July 4, 2025, which permanently increased the CTC to $2,200 per child starting with tax year 2025 and indexed it for inflation from 2027 onward, ensuring the credit retains its value over time.

How Much Child Tax Credit You Can Get

For 2026, the maximum Child Tax Credit is $2,200 per qualifying child under the age of 17. This increase was made permanent under the OBBBA and will be adjusted for inflation starting in tax year 2027.

The refundable portion, known as the Additional Child Tax Credit (ACTC), remains at up to $1,700 per qualifying child for 2026. Even if you owe little or no federal income tax, you may still receive up to $1,700 per child as a refund, provided you have earned income of at least $2,500.

You cannot claim the CTC for a child who is 17 years of age or older. However, if your dependent is 17 or older and still a student, you may be eligible for the Other Dependent Credit of up to $500.

Important for 2026: Both the child and the taxpayer must have a valid Social Security Number (SSN), not an ITIN, to claim the CTC. This requirement was made permanent under the OBBBA. See the ITIN vs. SSN section below for full details.

Who Can Get the Child Tax Credit?

Income Thresholds

The full CTC of $2,200 per child is available to taxpayers whose Modified Adjusted Gross Income (MAGI) is at or below:

• Single filers / Head of Household / Married Filing Separately: Up to $200,000
• Married Filing Jointly / Surviving Spouse: Up to $400,000

If your MAGI exceeds these limits, the credit is reduced by $50 for every additional $1,000 above the applicable threshold.

Qualifying Child Requirements

To claim the CTC, the child must meet all of the following tests:

Age test: The child must be under age 17 at the end of the tax year.

Relationship test: The child must be your son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of any of these (such as a grandchild, niece, or nephew).

Residency test: The child must have lived with you for more than half of the tax year. Temporary absences for school, vacation, medical care, or military service generally count as time lived with you. There are specific exceptions for divorced or separated parents.

Citizenship test: The child must be a US citizen, US national, or US resident alien. A child who is not a US citizen, national, or resident alien does not qualify for the CTC, regardless of residency or relationship.

SSN requirement: The child must have a valid Social Security Number issued before the due date of your tax return, including extensions. An Individual Taxpayer Identification Number (ITIN) does not qualify.

Support test: The child cannot have provided more than half of their own financial support during the tax year.

Joint return test: The child cannot file a joint return for the tax year, unless the only reason they are filing is to claim a refund of withheld taxes or estimated taxes paid.

Dependent test: The child must be claimed as a dependent on your federal tax return.

ITIN vs. SSN: A Critical Distinction

A common mistake that results in denied credits is using an ITIN instead of an SSN. An ITIN is issued by the IRS to individuals who are not eligible for an SSN and is used for tax filing purposes only. However, an ITIN does not qualify a child or taxpayer for the Child Tax Credit or the Additional Child Tax Credit. Both the child and the claiming taxpayer must have a valid SSN issued by the Social Security Administration. If your child was born during the tax year and you have not yet received their SSN, file for the SSN promptly. You may file for an extension and include the SSN once received.

Tiebreaker Rules

When two or more people can claim the same child, for example in cases of divorce, separation, or shared custody, the IRS applies tiebreaker rules to determine who has the right to claim the child:

1. If only one of the claimants is the child's parent, the parent wins
2. If both claimants are parents and the child lived with each for different amounts of time, the parent with whom the child lived longer during the year wins
3. If the child lived with each parent for the same amount of time, the parent with the higher AGI wins
4. If neither claimant is the parent, the claimant with the higher AGI wins

Parents can also agree to alternate who claims the child each year using IRS Form 8332, which allows the custodial parent to release the exemption to the non-custodial parent for a specific tax year.

Process of Claiming the Tax Credit

To claim the Child Tax Credit for 2026, file Form 1040 and attach Schedule 8812 (Credits for Qualifying Children and Other Dependents). On your return, include the names and valid Social Security Numbers of each qualifying child. For 2026, providing a valid SSN for both the child and the claiming taxpayer is a mandatory requirement under the OBBBA. An ITIN will not satisfy this requirement.

If you need to make changes to an already-filed return, you must file an amended return using Form 1040-X. Claim the credit only for children who meet all qualifying tests described above.

Example of Child Tax Credit

Example 1: Single filer, below the phase-out threshold

You have a five-year-old daughter and earn $60,000 per year as a single filer. Since your income is below the $200,000 phase-out threshold, you are eligible for the full $2,200 CTC. If you owe $1,500 in federal income tax, the $2,200 credit wipes out that liability entirely. Since your earned income exceeds $2,500, you may also receive up to $1,700 as a refund via the ACTC.

Example 2: Married couple filing jointly, above the phase-out threshold

You are a married couple filing jointly with $410,000 in income. Your income exceeds the $400,000 threshold by $10,000. The credit is reduced by $50 for every $1,000 above the limit: 10 x $50 = $500 reduction. Your CTC per qualifying child is $1,700.

Example 3: Single parent, partially phased out

As a single parent earning $205,000, your income exceeds the $200,000 threshold by $5,000. Your CTC is reduced by $250 (5 x $50), leaving you with a Child Tax Credit of $1,950 per qualifying child.

Example 4: Divorced parents, tiebreaker applies

Two parents are divorced. Their child lived with the mother for 8 months and the father for 4 months during 2026. Both parents attempt to claim the CTC. Under the tiebreaker rules, the mother wins because the child lived with her for the greater portion of the year. The father cannot claim the CTC unless the mother signs Form 8332 releasing the claim to him.

Special Situations

Divorced or Separated Parents

The custodial parent, meaning the parent with whom the child lived for the greater number of nights during the year, generally claims the CTC. The custodial parent may release the right to claim the child to the non-custodial parent by signing Form 8332 for a specific tax year. The non-custodial parent must attach the signed Form 8332 to their return to claim the credit. Note that even if the non-custodial parent claims the child as a dependent, the custodial parent may still claim the Earned Income Tax Credit (EITC) based on the same child.

Newborns and Adopted Children

A child born at any point during the tax year, including December 31, qualifies for the full CTC for that year. A child who was legally adopted during the year also qualifies, provided all other tests are met. For newly adopted children, the SSN may be replaced by an Adoption Taxpayer Identification Number (ATIN) issued by the IRS while the adoption is pending; however, once finalized, an SSN is required for ongoing CTC claims.

Children With Disabilities

There is no separate age exception for disabled children under the CTC rules. A qualifying child must still be under age 17 to qualify for the CTC, regardless of disability status. However, a disabled dependent who is age 17 or older may qualify for the Other Dependent Credit of up to $500.

Non-Custodial Parents

A non-custodial parent cannot claim the CTC simply by including the child on their return. The right to claim must be formally transferred by the custodial parent using Form 8332. Without this form, the IRS will apply the tiebreaker rules and the custodial parent's claim will take precedence.

Taxpayers With No Tax Liability

If your federal income tax liability is zero, the non-refundable portion of the CTC cannot reduce it further. However, if you have earned income of at least $2,500, you may still receive a refund of up to $1,700 per child through the ACTC. This is one of the most important aspects of the credit for lower-income families.

Mixed-Status Families

In a mixed-status household where one spouse is a US citizen or resident and the other is not, the CTC can still be claimed for qualifying children who are US citizens, nationals, or resident aliens and who have valid SSNs. The immigration status of a parent does not automatically disqualify a US citizen child from being claimed, but both the child and the taxpayer filing the claim must have valid SSNs.

At a Glance: 2026 CTC Key Figures

Conclusion

The Child Tax Credit remains one of the most valuable tax benefits for American families. With the OBBBA permanently increasing the credit to $2,200 per qualifying child and indexing it for inflation from 2027, there are more planning opportunities than ever. However, the qualifying child tests, SSN requirements, tiebreaker rules, and phase-out calculations require careful attention. NSKT Global's experienced tax professionals can help you determine eligibility, maximize your credit, and ensure accurate and timely filing.

The information provided here is for general informational purposes only and should not be construed as professional advice. Tax-related content is based on our understanding of tax laws as of the date of publication and may be subject to change.

FAQs

Q: Which form do I need to claim the Child Tax Credit?
File Form 1040 and attach Schedule 8812 (Credits for Qualifying Children and Other Dependents). Include the name and valid SSN of each qualifying child on your return.

Q: Can I claim the CTC if my child was born in December?
Yes. A child born at any point during the tax year, including December 31, qualifies for the full CTC for that year, provided all other tests are met.

Q: My child has an ITIN. Can I still claim the CTC?
No. An ITIN does not satisfy the SSN requirement for the Child Tax Credit or the Additional Child Tax Credit. The child must have a valid Social Security Number issued by the Social Security Administration before the due date of your return.

Q: Can both divorced parents claim the CTC for the same child?
No. Only one taxpayer can claim the CTC for the same child in the same tax year. The IRS tiebreaker rules determine who has the right to claim, generally the parent with whom the child lived for the greater number of nights. The custodial parent may release the claim to the non-custodial parent using Form 8332.

Q: What if my income is too high to qualify for the full CTC?
The credit phases out by $50 for every $1,000 of MAGI above $200,000 (single filers) or $400,000 (married filing jointly). Depending on how far above the threshold your income falls, you may still receive a partial credit.

Q: I owe no federal taxes. Can I still benefit from the CTC?
Yes, through the Additional Child Tax Credit (ACTC). If you have earned income of at least $2,500, you may receive a refund of up to $1,700 per qualifying child even if your tax liability is zero.