The 2023 child tax credit is up to $2,000 per child under age 17

For the 2023 tax year, the Child Tax Credit allows you to reduce your federal income tax by up to $2,000 for each may have access to child. A may have access to child must be under age 17 at the end of 2023, claimed as a dependent on your return, a U.S. citizen or national, and related to you as a son, daughter, stepchild, foster child, sibling, or descendant of any of these.

The credit phases out if your income exceeds certain thresholds. For single filers, the phase-out begins at $400,000 of modified adjusted gross income. For married couples filing jointly, it begins at $800,000. For each $1,000 (or fraction thereof) over the threshold, the credit reduces by $50 per child.

Part of the credit may be refundable, meaning you could receive money back even if you owe no tax. The refundable portion — called the Additional Child Tax Credit — is limited to $1,700 per child for 2023. To claim the refundable portion, you must have earned income of at least $2,500 during the year.

Key Takeaways

  • The maximum credit is $2,000 per child under 17, but the amount you receive depends on your income and tax liability.
  • If your income exceeds $400,000 (single) or $800,000 (married filing jointly), the credit begins to reduce by $50 for every $1,000 over the limit.
  • Up to $1,700 per child may be refundable if you have earned income of at least $2,500, meaning you could get money back on your tax return.
  • You must claim the child as a dependent and they must be under 17 at the end of 2023 to count toward the credit.

How income limits affect the credit amount

Your income determines whether you receive the full $2,000 credit or a reduced amount. The IRS uses your modified adjusted gross income (MAGI) to calculate this. For 2023, if you file as single and your MAGI is $400,000 or less, or married filing jointly with MAGI of $800,000 or less, you are not subject to the phase-out.

Once your income exceeds these thresholds, the credit decreases. The reduction is $50 for each $1,000 (or any part of $1,000) over the limit. For example, if you are single with MAGI of $401,000, you are $1,000 over the threshold. Your credit reduces by $50 per child. If your MAGI is $401,500, the reduction is still $50 per child because you round up any fraction of $1,000.

Other filing statuses have different thresholds. Head of household filers have a $400,000 threshold, the same as single filers. Married filing separately have a $400,000 threshold each.

Refundable versus non-refundable portions

The Child Tax Credit has two parts: a non-refundable portion and a refundable portion. The non-refundable portion reduces the tax you owe, dollar for dollar, up to the amount of your tax liability. If the credit is larger than your tax liability, the excess does not carry forward to future years — it simply does not apply.

The refundable portion — the Additional Child Tax Credit — works differently. This portion can result in a refund even if you owe no federal income tax. For 2023, the refundable portion is limited to $1,700 per child. To claim any refundable amount, you must have earned income of at least $2,500 during the year. Earned income includes wages, salaries, self-employment income, and certain other compensation, but not investment income or Social Security benefits.

The refundable credit is calculated as 15 percent of your earned income above $2,500, up to the $1,700 maximum per child. For most families, the full $1,700 refundable amount is available if they have enough earned income.

What counts as a may have access to child

To claim the credit for a child, that child must meet specific requirements. The child must be your son, daughter, stepchild, foster child, or a descendant of any of these (such as a grandchild). Siblings and their descendants also count. The child must be under age 17 at the end of 2023, a U.S. citizen, national, or resident alien, and have a valid Social Security number.

You must claim the child as a dependent on your tax return. The child must live with you for more than half the year, though temporary absences for school, medical care, military service, or detention do not count against this requirement. If parents are divorced or separated, the parent with custody for the greater part of the year generally claims the child, unless they sign a form releasing the claim to the other parent.

A child cannot be claimed by more than one person. If multiple people could claim the same child, the IRS has rules about who takes priority. Generally, the parent with the highest adjusted gross income claims the child if both parents could claim them.

How to report the credit on your tax return

You report the Child Tax Credit on Form 1040 (U.S. Individual Income Tax Return) or Form 1040-SR if you are age 65 or older. You will need the child's full name and Social Security number. The credit is claimed on line 19 of the 2023 Form 1040.

If you think you may be may have access to to the refundable portion of the credit, you will also complete Schedule 8812 (Credits for may have access to Children and Other Dependents). This form calculates how much of the credit is refundable based on your earned income and tax liability. You attach Schedule 8812 to your Form 1040.

If you file electronically, tax software typically walks you through the questions needed to calculate the credit correctly. If you file by paper, make sure you have the child's Social Security number correct and that you have entered all required information, as errors can delay your refund or result in the IRS reducing the credit.

Changes from previous years

The $2,000 per-child credit amount has been in place since 2018. However, the refundable portion has changed. For 2021 and 2022, the refundable portion was temporarily increased to $1,600 per child (for 2021) and $1,700 per child (for 2022) as part of pandemic relief. For 2023, the refundable portion remains at $1,700 per child.

In 2021 and 2022, the IRS also made advance payments of the credit directly to families, reducing the amount claimed on tax returns. For 2023, there are no advance payments. You claim the full credit amount on your tax return when you file.

The income thresholds for phase-out have remained at $400,000 (single) and $800,000 (married filing jointly) since 2018. These thresholds are not adjusted annually for inflation.

Frequently Asked Questions

Can I claim the credit for a child who turned 17 in 2023?

No. The child must be under age 17 at the end of 2023 (December 31, 2023). If your child turned 17 at any point during 2023, they do not count for the 2023 credit. However, you may be able to claim a different tax credit for that child, such as the Credit for Other Dependents, which is $500 per dependent.

What if I do not have a Social Security number for my child?

You cannot claim the Child Tax Credit without a valid Social Security number for the child. If your child was born in the U.S. but does not yet have a number, you can apply through the Social Security Administration. If your child is not a U.S. citizen or national, they must have an Individual Taxpayer Identification Number (ITIN) to count as a may have access to child.

Can I claim the credit if my child lives with their other parent?

Generally, only one parent can claim the credit. The parent with custody for the greater part of the year usually claims it. If you and the other parent share custody equally, the parent with the higher adjusted gross income typically claims the child. The other parent can claim the child only if the custodial parent signs Form 8332 releasing the claim.

What happens if I claimed the wrong amount of credit?

If you made an error on your return, you can file an amended return using Form 1040-X. The IRS will recalculate your tax and either send you a refund or bill you for additional tax owed. If the IRS catches the error, they will contact you with the correction and adjust your refund or bill accordingly.

Is the credit the same for all children in my household?

Yes, each may have access to child under 17 receives the same credit amount (up to $2,000), subject to the same income phase-out rules. If you have three may have access to children and your income does not trigger phase-out, you can claim up to $6,000 total ($2,000 per child).