What is the Additional Child Tax Credit?

The Additional Child Tax Credit (ACTC) is the refundable portion of the Child Tax Credit. If your CTC exceeds your income tax liability, you may receive up to 15% of earned income above $2,500 as a refundable amount, capped at the unused credit. This means you can receive a refund from the ACTC even if you owe no income tax.

Who qualifies as a qualifying child for the CTC?

A qualifying child must be: under age 17 at the end of the tax year; a child, stepchild, foster child, sibling, or descendant of any of these; lived with you for more than half the year; did not provide more than half of their own support; is a U.S. citizen, national, or resident alien; and has a valid Social Security number issued before the due date of the return.

Does the PATH Act delay Child Tax Credit refunds?

The PATH Act applies to returns claiming the Additional Child Tax Credit (ACTC), not the non-refundable CTC itself. If your return includes the ACTC, the IRS cannot release your refund before February 15, regardless of when you file. Most ACTC-related refunds arrive within 2 to 3 weeks after February 15.

How does the OBBBA CTC compare to the TCJA CTC?

Under the TCJA (TY 2018–2024), the maximum CTC was $2,000 per qualifying child. The ACTC was capped at $1,700 per child for TY 2024. Under the OBBBA (TY 2025–2028), the maximum CTC increased to $2,200 per qualifying child. The phase-out thresholds ($200K single / $400K MFJ) were retained from the TCJA structure.

Can I claim the CTC and a Trump Account for the same child?

Yes. The CTC and a Trump Account are independent OBBBA provisions. The CTC is a current-year credit that reduces income tax liability (and may generate a refund via the ACTC). The Trump Account is a long-term savings vehicle with a $1,000 federal seed for children born after December 31, 2024, and up to $5,000 annual contributions. Both can apply to the same child.

What form do I use to claim the Child Tax Credit?

The CTC and ACTC are calculated on Schedule 8812 (Credits for Qualifying Children and Other Dependents), filed with Form 1040. The non-refundable CTC flows to Form 1040 line 19. The refundable ACTC flows to Form 1040 line 28.

OBBBA · IRC §24 · $2,200 Per Child · TY 2025–2028 · Refundable ACTC

Child Tax Credit Under the OBBBA (2025): $2,200 Per Child, Eligibility, and Refundability

Q: When does the OBBBA Child Tax Credit expire?

The OBBBA CTC provisions expire after December 31, 2028. Without further legislation, the credit reverts to $1,000 per qualifying child (the pre-TCJA amount). Congress may act to extend or make permanent the higher amounts before the 2028 sunset.

How the One Big Beautiful Bill Act changed the Child Tax Credit. Covers the $2,200 per qualifying child amount, phase-out thresholds, the ACTC refundable formula, qualifying child requirements, the PATH Act hold, and a comparison to prior TCJA law.

Calculate your OBBBA Child Tax Credit. Enter your filing status, AGI, number of qualifying children, and estimated tax liability to see your CTC, phase-out reduction, and refundable ACTC amount.

Open Child Tax Credit Calculator →

Short Answer

The Child Tax Credit is $2,200 per qualifying child for tax years 2025 through 2028 under the One Big Beautiful Bill Act. The credit phases out at $200,000 AGI for single filers and $400,000 for married filing jointly. The refundable portion (Additional Child Tax Credit) is 15% of earned income above $2,500, up to the remaining unused credit. Returns claiming the ACTC are held by the IRS until after February 15 under the PATH Act.

Key Takeaways

The OBBBA increased the CTC from $2,000 (TCJA) to $2,200 per qualifying child for TY 2025–2028.
Phase-out: $200,000 AGI single/HOH/MFS; $400,000 AGI MFJ. Reduction: $50 per $1,000 over threshold.
The ACTC (refundable portion) equals 15% of earned income above $2,500, capped at unused CTC.
Qualifying child must be under age 17 at year-end with a valid Social Security number.
ACTC filers face a PATH Act hold: the IRS cannot release refunds before February 15.

Written by: Munib Ur Rehman | Reviewed by: Nausheen Shahid (LMN Tax Inc.) | Tax Year 2025 | Last Reviewed: March 2026

What Did the OBBBA Change About the Child Tax Credit?

The One Big Beautiful Bill Act (Pub. L. 119-21, signed July 4, 2025) increased the maximum Child Tax Credit from $2,000 to $2,200 per qualifying child. This change is effective for tax years 2025 through 2028.

The CTC was originally $400 per child, then $1,000, then raised to $2,000 by the Tax Cuts and Jobs Act of 2017. The TCJA increase was set to expire after 2025. The OBBBA extended and increased it to $2,200.

For tax year 2025, the increase is $200 per qualifying child compared to the prior $2,000 limit. A family with two qualifying children gains $400 in additional credit under the OBBBA. A family with three children gains $600.

The credit is governed by IRC §24. The phase-out structure ($200,000 / $400,000 thresholds, $50 per $1,000 reduction) was retained from the TCJA framework.

CTC Comparison: TCJA (2024) vs. OBBBA (2025–2028)
Item	TCJA (TY 2024)	OBBBA (TY 2025–2028)
Maximum CTC per child	$2,000	$2,200
Max ACTC per child	$1,700 (TY 2024)	Up to $1,700 per child
Phase-out: single/HOH	$200,000 AGI	$200,000 AGI (unchanged)
Phase-out: MFJ	$400,000 AGI	$400,000 AGI (unchanged)
Phase-out rate	$50 per $1,000	$50 per $1,000 (unchanged)
ACTC formula	15% of earned income above $2,500	15% of earned income above $2,500
Qualifying child age	Under 17	Under 17 (unchanged)
SSN required	Yes	Yes (unchanged)
Sunset	December 31, 2025 (pre-OBBBA)	December 31, 2028

Who Is a Qualifying Child for the CTC?

The qualifying child tests are defined in IRC §24 and IRC §152. A child must meet all of the following to count for the Child Tax Credit:

Age: Under age 17 at the end of the tax year. A child who turns 17 during 2025 does not qualify for the 2025 CTC.
Relationship: Your child, stepchild, foster child placed by an authorized agency, sibling, step-sibling, half-sibling, or a descendant of any of these (e.g., grandchild, niece, nephew).
Residency: Lived with you for more than half of the tax year. Temporary absences for school, medical care, or detention count as living with you.
Support: Did not provide more than half of their own financial support during the year.
Dependent: Claimed as your dependent on your return. You cannot claim a child as a dependent if someone else already claimed them.
Citizenship: U.S. citizen, U.S. national, or U.S. resident alien.
Social Security number: Must have a valid SSN issued by the Social Security Administration before the due date of the return (including extensions). An ITIN is not sufficient for the CTC.

For tax year 2025, a child born January 1, 2025 through December 31, 2025 is under age 17 at year-end and meets the age test. A child born in 2025 may also qualify for the $1,000 Trump Account federal seed, which is a separate OBBBA benefit.

How the Phase-Out Works

The CTC is reduced for higher-income taxpayers. The phase-out is calculated based on your modified adjusted gross income (MAGI), which for most taxpayers equals AGI from line 11 of Form 1040.

The phase-out begins at:

$200,000 MAGI for single filers, heads of household, and married filing separately
$400,000 MAGI for married filing jointly

For each $1,000 (or fraction thereof) of MAGI above the applicable threshold, the credit is reduced by $50. The credit cannot be reduced below zero.

Example: A single filer with $215,000 AGI and one qualifying child. AGI excess: $215,000 minus $200,000 = $15,000. Number of $1,000 increments: 15. Phase-out: 15 × $50 = $750. Net CTC: $2,200 minus $750 = $1,450.

The credit is fully eliminated for single filers at approximately $244,000 AGI with one child ($2,200 ÷ $50 = 44 increments × $1,000 = $44,000 above threshold). With two children, elimination occurs at approximately $288,000 AGI.

How the Additional Child Tax Credit (ACTC) Works

The ACTC is the refundable portion of the Child Tax Credit. It matters most to lower-income families whose CTC exceeds their income tax liability.

The ACTC equals the lesser of:

The amount of the CTC that exceeds your federal income tax liability (the unused credit)
15% of your earned income above $2,500

For tax year 2025, "earned income" for ACTC purposes includes wages, salaries, tips, and net self-employment income.

Example: A single parent with one child. Net CTC: $2,200. Federal income tax before credits: $800. Non-refundable CTC applied: $800 (reduces tax to $0). Unused CTC: $1,400. Earned income: $38,000. ACTC formula: 15% × ($38,000 − $2,500) = 15% × $35,500 = $5,325. ACTC (capped at lesser of unused CTC $1,400 and $1,700 cap): $1,400. Total CTC benefit: $800 (non-refundable) + $1,400 (refundable) = $2,200.

Married filing separately filers are generally not eligible for the ACTC.

Alternative ACTC for Taxpayers with 3+ Children: Taxpayers with three or more qualifying children may use an alternative ACTC calculation based on the amount by which their combined Social Security and Medicare taxes (or SECA taxes for self-employed) exceed their Earned Income Credit. This alternative often produces a higher refundable amount. Schedule 8812 calculates both methods and applies the more favorable result. This guide focuses on the standard 15% formula.

PATH Act: Why ACTC Refunds Are Delayed

The Protecting Americans from Tax Hikes (PATH) Act requires the IRS to hold all refunds that include the Additional Child Tax Credit until after February 15 each year.

This rule applies regardless of when you file your return. Filing in January does not move your refund earlier if your return includes the ACTC.

Most ACTC refunds are released within 2 to 3 weeks after February 15. If you file after February 15, the PATH Act hold does not apply, and the standard processing window of 10 to 21 days applies to e-filed returns.

PATH Act applies to ACTC only, not to the non-refundable CTC. If your CTC is fully absorbed by your income tax liability and you have no ACTC, the PATH Act hold does not apply to your refund. The hold is triggered by the presence of a refundable ACTC amount on your return.

To estimate when your ACTC refund may arrive, use the Refund Date Estimator and select the "Includes EITC or Additional Child Tax Credit" return type for an accurate timeline projection.

How the CTC Interacts with Other OBBBA Provisions

The Child Tax Credit is one of several family-focused provisions in the OBBBA. Two others are closely related for parents of young children.

Trump Account (MAGA Account)

Children born after December 31, 2024 may be eligible for a Trump Account: a new savings vehicle created by the OBBBA that provides a $1,000 federal seed contribution and allows up to $5,000 in annual after-tax contributions. The Trump Account is a long-term savings tool invested in U.S. equity index funds, with distributions available beginning at age 18.

The CTC and a Trump Account operate independently. A parent may claim the CTC for the same child who has a Trump Account. Contributing to a Trump Account does not reduce your CTC, and the CTC does not affect the Trump Account's $1,000 federal seed or contribution limit. Use the Trump Account Calculator to project account growth to age 18.

Other OBBBA Deductions

The OBBBA also created above-the-line income deductions for tips (IRC §224), overtime (IRC §225), and auto loan interest (IRC §163(h)(4)), and expanded the SALT cap from $10,000 to $40,000 for itemizers. These deductions reduce your AGI and taxable income, which may reduce your income tax liability. A lower tax liability means more of your CTC may become refundable as ACTC rather than being absorbed by tax liability. They are calculated separately from the CTC.

Confirmed vs. Pending Guidance

The core CTC rules are set in statute. A small number of implementation details are still pending IRS guidance.

Confirmed by Statute

Credit amount$2,200 per qualifying child, TY 2025–2028 Confirmed

Phase-out thresholds$200,000 single/HOH · $400,000 MFJ (same as TCJA) Confirmed

Phase-out rate$50 per $1,000 over threshold Confirmed

ACTC formula15% of earned income above $2,500, up to unused CTC, refundable Confirmed

PATH Act delayACTC refunds held until after February 15 Confirmed

Schedule 8812Required to claim CTC and ACTC Confirmed

SunsetReverts to $1,000 per child after TY 2028 Confirmed

Pending IRS guidance: IRS has not issued final guidance on the maximum ACTC per child for TY 2025. The ACTC formula (15% of earned income above $2,500) is confirmed. IRS has not issued a separate OBBBA-specific publication for CTC rules. Current guidance applies IRC §24 as amended. Provisional

Who Benefits Most

Likely Benefits Most

Families with 2–3 qualifying children under 17, AGI under phase-out thresholdsFull $2,200 per child. Entire credit available with no reduction.

Families with earned income above $2,500 who owe little or no income taxACTC is refundable. Low or zero income tax means more of the credit becomes a cash refund.

Families with a child born in 2025CTC applies in the first tax year. Trump Account $1,000 federal seed also available — both apply independently.

Gets Little or No Benefit

Families with AGI above $400,000 MFJPhase-out eliminates the credit entirely at high income levels.

Families with no earned incomeACTC not available. Non-refundable CTC still applies if there is income tax liability.

Families with all children age 17 or older at year-endAge-17 cutoff disqualifies older children. A $500 Other Dependent Credit may still apply.

Practitioner Insight (LMN Tax Inc.)

LMN Tax Inc. — Client Pattern

In practice, many clients with young children do not realize the $200 per child OBBBA increase flows through to the ACTC for lower-income families. For a family with two children and modest income, the additional $400 in CTC often converts entirely to a larger ACTC refund rather than reducing a tax bill that was already near zero. The PATH Act hold matters here: these families count on mid-February refunds for rent or bills. Setting the right expectation about the February 15 hold date is often the most practical thing we can communicate at intake.

Real-World Scenario

Family profile: Married filing jointly. Two qualifying children, ages 5 and 8. AGI: $110,000. Tax liability before credits: $8,400.

Pre-OBBBA (TY 2024): CTC = $2,000 × 2 children = $4,000 total. No phase-out (AGI below $400,000 MFJ threshold). Credit reduces tax liability from $8,400 to $4,400.

OBBBA (TY 2025–2028): CTC = $2,200 × 2 children = $4,400 total. Phase-out still does not apply. Credit reduces tax liability from $8,400 to $4,000. Net improvement: $400 in additional savings compared to prior law.

ACTC implication: This family has sufficient tax liability to absorb the full credit as a non-refundable offset. For a family with lower tax liability — say $2,000 — the OBBBA increase adds $400 more credit, a larger portion of which becomes refundable ACTC (up to 15% of earned income above $2,500, capped at $1,700 per child for TY 2025).

Scenario 1: MFJ, 3 Children, $65,000 Earned Income

CTC before phase-out (3 × $2,200)$6,600

Estimated income tax liability$3,200

Non-refundable CTC applied$3,200 (reduces tax to $0)

Unused CTC$3,400

ACTC: 15% × ($65,000 − $2,500)$9,375 — capped at unused CTC of $3,400

ACTC refund$3,400

Total CTC benefit$6,600 ($3,200 tax reduction + $3,400 refund)

Scenario 2: MFJ, 2 Children, $380,000 AGI

CTC before phase-out (2 × $2,200)$4,400

Phase-out threshold (MFJ)$400,000

AGI above threshold$0 (AGI is below threshold)

Phase-out reduction$0

CTC available$4,400 (full credit)

NoteMFJ earners up to $399,999 AGI receive the full credit. Phase-out only begins at $400,000.

When These Rules May Not Apply

Child turns 17 in the tax year: The age cutoff is under 17 at December 31 of the tax year. A child who was 16 for most of 2025 but turns 17 before December 31 does not qualify.
No valid SSN: A child with an Individual Taxpayer Identification Number (ITIN) instead of an SSN does not qualify for the CTC or ACTC. An ITIN is not a valid SSN for this purpose.
Married filing separately: MFS filers can generally claim the non-refundable CTC against their tax liability but are not eligible for the refundable ACTC.
Divorced or separated parents: The CTC goes to the custodial parent (the one with whom the child lived for more than half the year) unless the custodial parent releases the exemption to the non-custodial parent on Form 8332. The ACTC cannot be transferred to the non-custodial parent even with Form 8332.
Child provided more than half their own support: A child who worked and provided more than half of their own support fails the support test. This is rare for children under 17 but can occur.
State CTC conformity: Many states have not conformed to the OBBBA increase. Your state child tax credit, if any, may be based on the prior $2,000 federal amount or a separate state formula.
After 2028: The OBBBA provisions sunset after December 31, 2028. The $2,200 amount, phase-out thresholds, and other changes revert without further legislation.

Frequently Asked Questions

What is the Child Tax Credit for 2025 under the OBBBA?

The CTC is $2,200 per qualifying child for tax year 2025. It applies to tax years 2025 through 2028. Without further legislation, it reverts to $1,000 after December 31, 2028.

What is the ACTC and who gets it?

The Additional Child Tax Credit (ACTC) is the refundable portion of the CTC. Taxpayers whose CTC exceeds their income tax liability may receive up to 15% of earned income above $2,500 as a cash refund, capped at the unused credit amount. Married filing separately filers generally cannot claim the ACTC.

Does the PATH Act affect everyone who claims the CTC?

No. The PATH Act hold applies only to returns that include a refundable ACTC amount. If your entire CTC is absorbed by your income tax liability and there is no ACTC, the PATH Act does not delay your refund. The hold is triggered by the presence of an ACTC on your return.

Can I claim the CTC and the Trump Account for the same child?

Yes. The CTC and a Trump Account are independent OBBBA provisions. The CTC reduces your current-year income tax and may generate a refund. The Trump Account is a long-term savings vehicle with a $1,000 federal seed for children born after December 31, 2024. Both can apply to the same qualifying child.

What form do I use to claim the CTC and ACTC?

Schedule 8812 (Credits for Qualifying Children and Other Dependents) is attached to Form 1040. The non-refundable CTC flows to Form 1040 line 19. The refundable ACTC flows to Form 1040 line 28. Most tax software calculates both automatically when you enter your dependents.

Does the OBBBA CTC apply retroactively to 2024?

No. The OBBBA was signed on July 4, 2025 and the CTC changes are effective beginning with tax year 2025. For tax year 2024 (filed in 2025), the prior $2,000 TCJA limit applies with a maximum ACTC of $1,700 per child.

Do OBBBA income deductions (tips, overtime, SALT) affect how much CTC I can claim?

Indirectly. The No Tax on Tips, No Tax on Overtime, Auto Loan Interest, and SALT deductions reduce your AGI and taxable income, which lowers your income tax liability before credits. A lower tax liability means more of your CTC may flow through as refundable ACTC rather than being absorbed by the tax bill. The CTC itself is not changed by these deductions, but the split between non-refundable and refundable portions can shift.

When does the OBBBA Child Tax Credit expire?

The OBBBA CTC provisions sunset after December 31, 2028. For tax years 2029 and beyond, the credit would revert to $1,000 per qualifying child absent further legislation. The phase-out thresholds and ACTC formula would also revert to pre-TCJA levels.

Sources

Related Tools and Guides

What To Do Next

Next Step

Use the Child Tax Credit Calculator to estimate your CTC, phase-out reduction, and refundable ACTC for tax year 2025. Enter your filing status, AGI, number of qualifying children, earned income, and estimated tax before credits to get a full breakdown.

If your return will include the ACTC, use the Refund Date Estimator to estimate when your IRS deposit will arrive. Select the ACTC return type in that calculator to account for the PATH Act hold.

If you have children born after December 31, 2024, review the Trump Account Guide to understand the $1,000 federal seed and $5,000 annual contribution limit that apply to those same children independently of the CTC.

The CTC increase is one of six OBBBA provisions for TY 2025–2028. If you also have tip income, overtime pay, or a new car loan, additional deductions may apply on the same return. See the OBBBA Tax Changes Guide for a complete comparison of all six provisions and how to coordinate them at filing.

Disclaimer: This guide is for educational purposes only and does not constitute tax or legal advice. CTC eligibility depends on individual circumstances including qualifying child tests under IRC §24 and §152. The OBBBA provisions are effective TY 2025–2028. Consult a qualified tax professional for advice specific to your situation.