What Is the Additional Child Tax Credit (ACTC)?

Tax breaks can reduce what families owe at filing time, but some credits can also result in money being refunded after federal income tax liability reaches zero. The Child Tax Credit (CTC) includes a refundable component known as the Additional Child Tax Credit (ACTC). For 2026, the CTC has a $2,200 maximum for each qualifying child, while the ACTC has a $1,700 per-child refund limit.

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What Is the Additional Child Tax Credit?

The Additional Child Tax Credit can make part of the Child Tax Credit refundable to taxpayers whose federal income tax bill is too small to absorb the entire credit. Instead of losing all of the unused amount when tax liability reaches zero, an eligible filer may receive some of it with a tax refund.

For the 2026 tax year, a qualifying child can generate a Child Tax Credit of as much as $2,200. The refundable amount available under the ACTC is limited to $1,700 for each qualifying child, with the actual refund determined by income and other requirements.

How the Additional Child Tax Credit Works

The amount available through the ACTC depends in part on earned income. The calculation generally uses 15% of earned income above $2,500, subject to the refundable limit and the amount of Child Tax Credit that remains after reducing federal income tax liability.

For example, suppose you qualify for a $2,200 Child Tax Credit and have $900 of federal income tax liability before applying it. The credit could eliminate that $900 liability, leaving $1,300 potentially available through the ACTC. Whether you receive the entire $1,300 would depend on the earned income calculation and other applicable rules.

Taxpayers use Schedule 8812 with Form 1040 to calculate the CTC and ACTC.

A qualifying child generally must:

Be younger than 17 at the end of the tax year.
Have the required relationship to the taxpayer, such as a son, daughter, stepchild, eligible foster child, sibling or a descendant of one of these relatives.
Be claimed as a dependent on the taxpayer’s return.
Not have provided more than half of their own support during the year.
Have lived with the taxpayer for more than half the year, subject to applicable exceptions.
Be a U.S. citizen, U.S. national or U.S. resident alien.
Meet the applicable Social Security number requirements.
Generally not file a joint return except in limited circumstances involving a refund claim.

Who Is Eligible for the Additional Child Tax Credit?

Parents looking up income levels to qualify for the additional child tax credit (ACTC).

Eligibility depends on several factors, including earned income, the number of qualifying children and the amount of Child Tax Credit that remains after offsetting tax liability.

The ACTC generally requires at least $2,500 of earned income. Wages, salaries and net earnings from self-employment can count toward this requirement, while income such as interest and dividends generally does not qualify as earned income for the calculation.

The available Child Tax Credit is gradually reduced once modified adjusted gross income passes $200,000 for most filing statuses or $400,000 for a joint return. The reduction is $50 for each $1,000, or portion of $1,000, above the applicable income level.

Additional Child Tax Credit Example

Consider a married couple filing jointly with one qualifying child and $74,500 of earned income. Subtracting the $2,500 threshold leaves $72,000. Applying the 15% formula produces $10,800, well above the $1,700 maximum refundable amount for one child in 2026.

Now assume the couple qualifies for the full $2,200 Child Tax Credit and uses $1,000 of it to reduce their federal income tax liability to zero. That leaves $1,200 of unused credit. Because the earned income calculation supports at least that amount and $1,200 is below the $1,700 refundable ceiling, the couple could potentially receive $1,200 through the ACTC.

Income can become more important for households with multiple qualifying children. Suppose a couple has $24,500 of earned income and three qualifying children. After subtracting $2,500, $22,000 remains. Multiplying that amount by 15% produces $3,300. Even though the per-child refundable limits could otherwise permit a larger amount, the couple’s ACTC may be limited to $3,300 after completing the applicable Schedule 8812 calculations.

Child Tax Credit vs. Additional Child Tax Credit

The Child Tax Credit reduces the federal income tax due on a return. The Additional Child Tax Credit operates differently by allowing qualifying taxpayers to recover some credit that remains after their tax bill has been reduced to zero.

In 2026, each eligible child can produce a maximum CTC of $2,200. Of that total, no more than $1,700 for each child can be paid back to the taxpayer under the ACTC rules.

How to Claim the Additional Child Tax Credit

Taxpayers calculate the Child Tax Credit and any refundable amount on Schedule 8812 and submit it with Form 1040. The calculation takes into account the children claimed on the return, earned income and the amount of federal income tax owed before the credit is applied.

Identification requirements also apply to taxpayers and qualifying children. A child must have the required Social Security number for the credit and taxpayers should verify that the identifying information reported on the return satisfies the rules for the applicable tax year.

Keeping records that establish a child’s age, relationship, residency and dependent status can also be important if the IRS requests documentation supporting the credit.

Bottom Line

Mother researching how much of a tax refund she could get with the additional child tax credit (ACTC).

The ACTC may generate a refund for families that have Child Tax Credit remaining after their federal income tax has been reduced to zero. In 2026, the maximum Child Tax Credit is $2,200 for each qualifying child, while ACTC refunds are capped at $1,700 per qualifying child. Earned income, the amount of tax owed before applying the credit and the number of eligible children determine how much of the refundable credit a taxpayer may receive.

Tax Planning Tips for Families

A financial advisor can walk you through smart ways to minimize your taxable income and maximize your refund. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Claiming qualifying depends may not be enough to avoid paying taxes. Fortunately, there are more tax tricks to lower your bill or turn it into a refund.