Update: Legislation passed in 2019 retroactively increased the Child Tax Credit maximum to $2,000 per qualifying child. The AGI limitation was increased to $400,000 (married filing jointly) and $200,000 (all others). The earned income threshold for claiming the ACTS decreased from $3,000 to $2,500. For more information, see the 2018 IRS Publication 972 (revised February 2020).
Some taxpayers cannot take full advantage of the child tax credit because their credit amount is more than the taxes they owe. These taxpayers may receive a payment for some or all of the remaining credit amount. This additional child tax credit is refundable, which means taxpayers can receive refunds even when they do not owe any tax.
Your credit amounts are automatically calculated based on the dependent and income information you have entered. To review your child tax credit and additional child tax credit:
The provisions of the American Recovery and Reinvestment Act (ARRA) changed the way the additional child tax credit is figured. As a result, more families are now eligible for the credit.
The ARRA reduced the minimum earned income amount used to calculate the additional child tax credit to $3,000. Before the ARRA, the minimum earned income amount was set to rise to $12,550. Reducing the amount to $3,000 allows more taxpayers to use the additional child tax credit, and increases the amount of payments they may receive.
The Tax Relief Act of 2010 extended these changes through 2011 and 2012. The American Taxpayer Relief Act of 2012 further extended the changes through December 2017.
The Tax Cuts and Jobs Act (TCJA) of 2017 increased the additional child tax credit to $1,400, increased the income at which the credit begins to phase out, and reduced the refundability threshold. Along with those changes, TCJA mandates that every child must have a Social Security Number in order to qualify. These changes are set to expire at the end of 2025.