What the 2023 Child Tax Credit is

The Child Tax Credit is a federal tax reduction that lowers the amount of income tax you owe, dollar for dollar, for each may have access to child. In 2023, the credit is worth up to $2,000 per child under age 17. You claim it when you file your federal tax return with the IRS.

This is different from a deduction. A deduction reduces the income the IRS counts. A credit reduces the tax itself. If you owe $3,000 in tax and you have one may have access to child, the $2,000 credit brings what you owe down to $1,000.

The credit phases out — meaning it shrinks — if your income is above a certain threshold. For 2023, the phase-out begins at $400,000 for married couples filing jointly and $200,000 for single filers.

Key Takeaways

  • The 2023 Child Tax Credit is $2,000 per child under age 17, and you claim it on your federal tax return.
  • Your child must have a valid Social Security number, live with you for more than half the year, and be a U.S. citizen, national, or resident alien.
  • The credit begins to shrink if your income exceeds $400,000 (married filing jointly) or $200,000 (single), and you lose $50 for every $1,000 over the limit.
  • You can receive part of the credit in advance payments during the year, or claim the full amount when you file your tax return.

Who can claim a child

You can claim the credit for a child who meets all of these conditions at the end of 2023: the child is under age 17; the child is your son, daughter, stepchild, foster child, sibling, or descendant of any of these (such as a niece or nephew); the child lived with you for more than half the year; you provided more than half the child's financial support for the year; and the child is a U.S. citizen, national, or resident alien with a valid Social Security number.

The child does not have to be a dependent on your tax return in all cases, but usually is. If you and another person both meet the conditions for the same child, the IRS has tiebreaker rules. Generally, the parent who had custody for the longer part of the year claims the credit, unless you and the other parent agree otherwise.

Foster children and adopted children count. A child you are in the process of adopting does not count until the adoption is final, even if a court has already placed the child with you.

Income limits and how the credit shrinks

The credit is worth the full $2,000 if your modified adjusted gross income (MAGI) is below the threshold for your filing status. For 2023, those thresholds are $400,000 for married couples filing jointly, $200,000 for single filers, and $200,000 for heads of household.

If your income is above the threshold, the credit reduces by $50 for every $1,000 (or fraction of $1,000) over the limit. For example, if you are single with MAGI of $201,000, you are $1,000 over the $200,000 threshold. The credit shrinks by $50, so instead of $2,000 per child, you get $1,950 per child.

The phase-out applies to each child separately. If you have two children and your income is $1,000 over the threshold, both credits shrink by $50 each, for a total reduction of $100.

Advance payments versus claiming on your return

The IRS can send you part of the credit as advance payments during the year, or you can wait and claim the full credit when you file your 2023 tax return in 2024. In 2023, advance payments were not automatically sent the way they were in 2021 and 2022. Instead, you had to register with the IRS to receive them.

If you received advance payments in 2023, the IRS will send you a letter showing how much you got. When you file your return, you report those payments, and the IRS calculates whether you are owed the rest of the credit or whether you have to repay some of it. If your income was lower than you expected, you may get a refund. If your income was higher, you may owe money back.

If you did not receive advance payments in 2023, you claim the full credit on your tax return. You will need the child's Social Security number and your own filing status and income information.

Refundable versus non-refundable portions

Part of the Child Tax Credit is refundable, meaning if the credit is larger than the tax you owe, the IRS sends you the difference as a refund. Part is non-refundable, meaning it can only reduce your tax to zero — it cannot create a refund.

In 2023, up to $1,700 of the $2,000 credit per child is refundable. The remaining $300 is non-refundable. This means if you owe $500 in tax and you have one may have access to child, the $500 goes to your tax bill, and the remaining $1,500 of the refundable portion comes back to you as a refund.

The refundable portion is sometimes called the Additional Child Tax Credit or ACTC. You do not claim it separately — it is part of the same $2,000 credit — but understanding the split matters if your tax bill is very small or zero.

What documents you need

To claim the credit, you need the child's full legal name and valid Social Security number. The Social Security number must match the name exactly as it appears on the Social Security Administration's records. If there is a mismatch, the IRS will reject the credit.

You also need your own filing status, income, and Social Security number or Individual Taxpayer Identification Number (ITIN). If you are married filing jointly, you need your spouse's information as well. Keep records showing the child lived with you for more than half the year — this can be school records, medical records, lease agreements, or utility bills with both your name and the child's name.

You do not have to send these documents with your return, but the IRS can ask for them later. If you cannot provide proof that the child lived with you or that you paid for more than half their support, the IRS will disallow the credit and you may owe back taxes plus interest and penalties.

How to claim the credit on your tax return

When you file your 2023 federal tax return, you report the credit on Schedule 8812 (for the refundable portion) and on your main return form (Form 1040 or 1040-SR). If you use tax software, it will walk you through the questions and fill in the forms for you.

You will enter each may have access to child's name and Social Security number. The software or form will calculate your income, apply the phase-out if needed, and determine how much credit you can claim. If you received advance payments, you will report those amounts and the software will reconcile them against the credit you are owed.

You can file your return on your own, with a tax preparer, or using free tax software if your income is below a certain threshold. The IRS website lists free options at IRS.gov.

Frequently Asked Questions

Can I claim the credit for a child who does not live with me full-time?

The child must live with you for more than half the year. If you share custody and the child lives with you for exactly half the year, you do not meet the requirement. If the child lives with you for more than half — even by a few days — you can claim the credit, unless you and the other parent have a written agreement saying the other parent claims it.

What if my child's Social Security number does not match their name?

Contact the Social Security Administration to correct the record before you file. If you file with a mismatch, the IRS will reject the credit. You can amend your return after the Social Security number is corrected, but this delays your refund.

Do I lose the entire credit if my income is slightly over the limit?

No. The credit shrinks by $50 for every $1,000 over the threshold, not all at once. If you are $500 over, the credit shrinks by $50. You keep most of the credit unless your income is very high.

Can I claim the credit if I am not a U.S. citizen?

You must have a valid Social Security number or ITIN to claim the credit. The child must be a U.S. citizen, national, or resident alien. If you are a nonresident alien, you generally cannot claim the credit, but there are exceptions if you are married to a U.S. citizen and file jointly.

What happens if I received advance payments but my income changed during the year?

When you file your return, you report your actual income for the full year. If your income was lower than expected, you may get a larger refund. If your income was higher, you may have to repay some of the advance payments. The IRS calculates the difference and adjusts your refund or bill accordingly.