The Additional Child Tax Credit (ACTC) provides financial relief for millions of low-income families, helping them support their children. This credit is designed for taxpayers who qualify for the Child Tax Credit (CTC) but cannot fully claim it due to their tax liability.
While the ACTC can reduce taxes, it also allows eligible taxpayers to receive a partial refund, making it a valuable benefit for many families.
ACTC
The ACTC is a refundable credit, meaning that if your tax liability is reduced to zero, you can still receive up to $1,600 per qualifying child as a refund for 2024 and 2025.
Points to Remember
- Parents with dependents under the age of 17 can claim up to $2,000 per child through the Child Tax Credit (CTC).
- If the full amount of the CTC cannot be used to offset taxes, the ACTC provides a refundable portion of the remaining credit.
- The credit is dollar-for-dollar, meaning it directly reduces the amount of taxes owed.
Refund
By law, the IRS cannot issue ACTC refunds before mid-February. If you filed your tax return early and qualified for the ACTC, you can expect payment by March 3, as long as the following conditions are met:
- Your return was filed electronically.
- You chose direct deposit as the refund method.
- The IRS did not find any errors in your return.
The IRS recommends using the “Where’s My Refund” tool to track your refund status. Most taxpayers who filed early should see updated refund information by February 22.
In general, the IRS processes refunds within 21 days of receiving a tax return. However, delays may occur if additional review is required.
Eligibility
To qualify for the ACTC, you must meet specific criteria related to your child’s age, relationship, and income.
Basic Requirements
| Requirement | Details |
|---|---|
| Child’s Age | Must be under 17 years old at the end of the tax year. |
| Relationship | Must be a son, daughter, stepchild, foster child, sibling, or descendant (e.g., grandchild or niece/nephew). |
| Income Limits | Phase-out begins at $200,000 for single filers and $400,000 for married couples filing jointly. |
| Social Security Number (SSN) | Child must have an SSN issued before the tax return due date (including extensions). |
To claim the ACTC, you must first complete the Child Tax Credit Worksheet found in the instructions for Form 1040 or 1040-SR. If you qualify, you must then fill out Schedule 8812 to determine the refundable portion of the credit.
The ACTC is an essential financial support for families with dependents. While the refund process may take time, using IRS tracking tools can help you stay updated on your payment status. Ensuring that you meet the eligibility criteria and file correctly will help you receive your refund smoothly.
FAQs
When will the ACTC refund be issued?
The IRS issues ACTC refunds after mid-February, with most payments arriving by March 3 if filed early.
How much can I get from the ACTC?
You can receive up to $1,600 per qualifying child as a refundable credit.
What is the income limit for the Child Tax Credit?
The phase-out begins at $200,000 for single filers and $400,000 for married couples.
Can I claim ACTC if my child doesn’t have an SSN?
No, a valid Social Security Number is required before the tax return due date.
How can I check my ACTC refund status?
Use the IRS ‘Where’s My Refund’ tool for the latest updates on your refund.
