The OBBBA Act increases the Child Tax Credit (CTC) from $2,000 to $2,500 per qualifying child under 17 years old. This is one of the most significant tax benefits for families with children, functioning as a direct credit against taxes owed (not a deduction). The refundable portion (Additional Child Tax Credit) allows families with little or no tax liability to still receive a cash refund.
"Real Impact: A family with 3 children under 17 could receive up to $7,500 in tax credits, directly reducing their tax bill or generating a significant refund."
2026 CTC Structure
| Component | 2025 | 2026 (OBBBA) |
|---|---|---|
| Credit per child (< 17 years) | $2,000 | $2,500 |
| Max refundable portion (ACTC) | $1,700 | $2,000 |
| Credit per dependent (> 17 years) | $500 | $500 (no change) |
| Minimum income for refund | $2,500 | $2,500 |
Phase-Out
| Status | Phase-out Begins | Reduction |
|---|---|---|
| Single / Head of Household | AGI > $200,000 | $50 for every $1,000 above |
| Married Filing Jointly (MFJ) | AGI > $400,000 | $50 for every $1,000 above |
Qualifying Child Requirements
- Age: Under 17 years old at the end of the tax year
- Relationship: Child, stepchild, adopted, sibling, or descendant of any of these
- Residency: Lived with you for more than half of the year
- SSN: The child MUST have a valid SSN for work (no ITIN)
- Dependent: Claimed as a dependent on your return
- Support: Did not provide more than half of their own support
"Important Restriction: Children with an ITIN (Individual Taxpayer Identification Number) do NOT qualify for the CTC. Only children with a valid Social Security Number (SSN) for work are eligible."
How to Claim the CTC
| Resource | Detail |
|---|---|
| Schedule 8812 | IRS form used to calculate and claim the CTC (attached to 1040) |
| IRS Free File | irs.gov/free-file |
| EITC Assistant | irs.gov — EITC Assistant (also checks CTC) |
| VITA | irs.gov — VITA (free preparation) |
| IRS Publication 972 | Detailed Child Tax Credit guide |
"Immediate Action: If you have children under 17 with an SSN, make sure to claim the $2,500 CTC per child on your 2026 return. Use the IRS EITC Assistant to verify your total eligibility including the Earned Income Tax Credit."