The Child Tax Credit stands at $2,200 per qualifying child in 2026, with up to $1,700 of that amount refundable for families whose credit exceeds their tax bill, according to the IRS. The 2025 tax law made the higher amount permanent and indexed it to inflation, ending years of scheduled expirations that kept families guessing what the credit would be worth from one year to the next.
For a family with two or three kids, this single credit routinely erases thousands of dollars of federal income tax, and for lower-income working families the refundable portion arrives as cash in the refund. But the credit comes with specific tests for the child, a Social Security number requirement, and income phaseouts that catch more two-earner households than people expect. Here is how the pieces fit in 2026.
The amount and what refundable means
The full credit is $2,200 for each qualifying child. If your income tax bill is large enough, the credit simply reduces it dollar for dollar. If your bill is smaller than your total credit, up to $1,700 per child can come back to you anyway, through what the IRS calls the Additional Child Tax Credit. That refundable piece phases in with work: it equals 15 percent of your earned income above $2,500, up to the cap. A family needs earnings well into five figures before the full refundable amount unlocks, which is why the lowest-income households often receive less than the headline number per child.
Who counts as a qualifying child
The child must be under age 17 at the end of the tax year, so a child who turns 17 in December 2026 does not qualify for that year. The child must be your son, daughter, stepchild, foster child, sibling, or a descendant of any of these, including grandchildren, and must have lived with you for more than half the year. You must claim the child as a dependent, the child cannot provide more than half of their own support, and the child must be a U.S. citizen, national, or resident alien.
There is also a paperwork rule with teeth: the child needs a Social Security number valid for employment, issued before the return’s due date. A child with only an ITIN does not qualify for this credit. Older teens and other dependents who miss the age or SSN tests are not worthless at tax time, though: they can qualify you for the separate $500 credit for other dependents.
Where the phaseouts begin
The credit starts shrinking once modified adjusted gross income passes $200,000 for single filers and heads of household, or $400,000 for married couples filing jointly. Above those lines, the credit drops by $50 for every $1,000 of additional income, or any fraction of $1,000. The math means a couple with two children and the full $4,400 in credits would see the benefit fully disappear only well above the threshold, so crossing $400,000 by a little costs you a little, not everything.
These thresholds are not indexed for inflation, so each year of wage growth pulls more families into the phaseout range. If a bonus or a second income pushed your household near the line, it is worth running the numbers before assuming the full credit.
How to claim it
The credit is claimed on your regular Form 1040, with Schedule 8812 doing the calculations for both the main credit and the refundable portion. Every major tax software fills it in from your dependent information automatically, and IRS Free File handles it at no cost for households under the program’s income limit. If you claim the refundable portion, note the mid-February rule: by law the IRS cannot issue refunds on returns claiming the Additional Child Tax Credit before mid-February of the filing season, so early filers see a short built-in delay.
Life changes that change the credit
A baby born any time in 2026, even on December 31, counts as living with you for the whole year and earns the full credit on next spring’s return. Divorced and separated parents should know the credit follows the dependent claim: generally the custodial parent claims the child, unless they release the claim to the other parent in writing on Form 8332. Alternating years is common, but both parents claiming the same child in the same year is a guaranteed IRS letter for someone.
The practical June takeaway is about withholding. If your family added a child this year, or your income moved toward or away from the phaseout range, the amount of tax coming out of your paychecks may no longer match what you will actually owe. The IRS withholding estimator accounts for the credit and tells you whether a new W-4 makes sense. Ten minutes now is the difference between a balanced return next April and an unpleasant surprise, in either direction.
