If you’re a parent or guardian, the child tax credit, or CTC, can lower your federal tax bill by up to $2,200 per qualifying child in 2025, up from $2,000 in 2024. But if your tax liability is too small — or nonexistent — you might not be able to use the full credit. That’s where the additional child tax credit, or ACTC, comes in.

The ACTC allows you to get up to $1,700 in 2025 of the unused child tax credit back as a tax refund. This means some taxpayers can benefit from the tax credit even when their income tax bill is zero. (The $1,700 value of the tax credit adjusts for inflation each year.)

What is the additional child tax credit?

The additional child tax credit is the refundable portion of the child tax credit. This means you can receive part of the child tax credit as a refund if you don’t have a tax bill. Unlike the standard CTC which can only reduce your tax bill to zero, the ACTC puts money back in your pocket.

Essentially, if you owe little or no income tax, the ACTC could provide a refund for each qualifying child. For example, a family with two eligible children might receive up to $3,400 as an ACTC refund, assuming they meet the income requirements.

Who qualifies for the additional child tax credit?

To claim the ACTC, you must meet all eligibility criteria for the child tax credit, plus a few additional rules.

You have at least one qualifying child

A qualifying child for the ACTC must meet these criteria:

• Be under age 17 at the end of the tax year
• Be your son, daughter, stepchild, foster child, sibling or a descendant (like a grandchild or niece)
• Have lived with you for more than half the year
• Not have provided more than half of their own financial support
• Have a valid Social Security number issued before the return’s due date

Children with only an individual taxpayer identification number (ITIN) don’t qualify for the CTC or ACTC but may be eligible for the credit for other dependents, which is nonrefundable (see this IRS page).

Keep in mind that a new eligibility rule in 2025 requires that the parent claiming the child tax credit also must have a Social Security number (if you’re a couple filing as married filing jointly, one spouse must have a valid SSN).

You have earned income above $2,500

The ACTC is only available to working taxpayers. You must have earned income — wages, salaries or self-employment income — above $2,500. Investment income and government benefits don’t count toward this threshold. The refund is calculated as 15 percent of your income over $2,500, up to the per-child cap.

Example: If your earned income is $10,000, the calculation would be:

15 percent of ($10,000 – $2,500) = $1,125

That amount could be refunded to you if you qualify, provided you haven’t already used that amount of the child tax credit to offset your tax bill.

You have unused child tax credit left over

You can only get an ACTC refund if you have some unused CTC left after reducing your tax bill to zero.

For example, if you qualify for a child tax credit of $2,200 in 2025 but you only owe $500 in taxes, you could receive up to $1,500 as a refund, depending on your income and number of children. But if your tax bill was $2,200 or more, the entire credit goes toward your tax, leaving nothing to refund.

Your income is below the phase-out threshold

The child tax credit begins to phase out once your modified adjusted gross income, or MAGI, exceeds $200,000 for head of household, single or married filing separately taxpayers, or $400,000 for married couples filing jointly.

For most taxpayers, your MAGI for the purposes of the child tax credit will be the same as your AGI. (For more details, your MAGI for the child tax credit is calculated on Schedule 8812, line 3.)

If your income exceeds those levels, your CTC, and any potential ACTC, will be reduced or eliminated.

You didn’t file Form 2555

To claim the additional child tax credit, you need to file a federal income tax return.

If you exclude foreign earned income using Form 2555, you can’t claim the ACTC, according to IRS rules.

How to claim the ACTC

You don’t apply separately for the ACTC; it’s part of claiming the child tax credit on your federal tax return. Here’s how to do it:

File Form 1040

To claim the ACTC, you need to file a Form 1040, even if you aren’t otherwise required to file. Nonresident aliens using Form 1040-NR are ineligible.

List each qualifying child and their Social Security numbers

On your 1040 form, list each qualifying child in the “dependents” section, along with their name, SSN, and relationship to you. A valid SSN is mandatory; otherwise, the IRS will deny the credit.

As noted above, starting in 2025, there’s a new eligibility rule: The parent claiming the child tax credit must also have a Social Security number (if you’re a married-filing-jointly taxpayer, then one spouse must have an SSN).

Complete Schedule 8812

Schedule 8812 is used to calculate how much of your CTC is refundable as an ACTC. If you’re using tax software, it’ll automatically generate the form based on your inputs.

The form walks you through:

• Calculating 15 percent of your income above $2,500
• Determining how much of your CTC is refundable
• Reporting that amount on your 1040 form

Wait for your refund

If you qualify for the ACTC, the IRS will include it in your total refund. However, keep in mind that if you’re filing your tax return at the beginning of the year, refunds that include the ACTC (or EITC) can’t be issued before mid-February, due to federal fraud-prevention rules.