Child Tax Credit Calculator

Understanding the US Child Tax Credit (CTC)

The Child Tax Credit (CTC) is an essential federal tax credit designed to assist working families with the financial costs of raising children under age 17. The maximum standard credit provides up to $2,000 per qualifying child, directly reducing your dollar-for-dollar federal tax liability.

Qualifying Child Criteria

To qualify for the Child Tax Credit, a child must satisfy all IRS eligibility criteria:

• Age: The child must be under age 17 at the end of the tax year.
• Relationship: Son, daughter, stepchild, foster child, sibling, stepsibling, or descendant of any of them.
• Support: The child must not have provided more than half of their own financial support for the year.
• Residency: The child must have lived with you for more than half of the tax year.
• Tax ID: The child must have a valid US Social Security Number (SSN) issued before the due date of the tax return.

MAGI Phase-Out Thresholds and Reductions

The credit phases out gradually for higher-income taxpayers based on Modified Adjusted Gross Income (MAGI):

• Married Filing Jointly: Phase-out begins at $400,000 MAGI.
• All Other Filing Statuses: Phase-out begins at $200,000 MAGI.

For every $1,000 (or fraction thereof) of MAGI above your filing threshold, the total credit is reduced by $50:

$$\text{Phase-Out Reduction} = \left\lceil \frac{\text{MAGI} - \text{Threshold}}{1000} \right\rceil \times \$50$$

Refundable Additional Child Tax Credit (ACTC)

If your eligible Child Tax Credit exceeds your total federal tax bill, you may receive a partial refund through the Additional Child Tax Credit (ACTC). The refundable ACTC amount is calculated as 15% of your earned income over $2,500, capped at up to $1,700 per child.