The additional child tax credit (ACTC) is the refundable part of the child tax credit. The child tax credit is nonrefundable and can only reduce tax to zero, so when it is larger than the tax it has to offset, the leftover moves across to the ACTC and can be paid out as a refund (IRS, Child Tax Credit). It is figured on Schedule 8812, which attaches to Form 1040, and it is capped per qualifying child and limited by the filer’s earned income.
What Makes It Additional
The word additional describes where the money comes from, not a second credit. The qualifying child test that decides which children count is in dependents, and the refundable split that decides whether a credit stops at zero is worked through in tax credit.
Schedule 8812 makes the handoff visible. Line 12 carries the credit the filer qualifies for, line 13 the limit set by tax, and line 14 the smaller of those two, the child tax credit and credit for other dependents that lands on Form 1040 line 19. When line 12 is larger than line 14, Part II-A opens and line 16a is that difference (IRS, Schedule 8812 (Form 1040) (2025)).
How Schedule 8812 Computes It
Three ceilings decide the refundable amount, the unused credit on line 16a, a per-child cap and an earned income test, and the lowest one wins. Line 16b multiplies the number of qualifying children under age 17 with the required social security number by $1,700. Line 18a carries earned income, line 19 subtracts $2,500 from it, and line 20 takes 15% of the remainder (IRS, Schedule 8812 (Form 1040) (2025)).
The credit is the smaller of line 17, itself the lesser of line 16a and line 16b, and line 20, and it lands on line 27 and then on Form 1040 line 28. A filer whose line 16b reaches $5,100, which is three or more qualifying children, goes on to Part II-B only where line 20 is less than line 17, and a bona fide resident of Puerto Rico can reach that part with fewer children (IRS, Schedule 8812 (Form 1040) (2025)).
Say a filer has two qualifying children, earned income well clear of the floor, and a small tax bill for the credit to work against.
Qualifying children under age 17 2
Earned income $30,000
Tax the credit can offset $500
Line 5 2 x $2,200 $4,400
Line 12 the credit before any limit $4,400
Line 13 the limit set by tax $500
Line 14 smaller of line 12 and line 13 $500 -> Form 1040 line 19
Line 16a $4,400 less $500 $3,900
Line 16b 2 x $1,700, the per-child cap $3,400
Line 17 smaller of line 16a and line 16b $3,400
Line 18a earned income $30,000
Line 19 $30,000 less $2,500 $27,500
Line 20 15% of $27,500 $4,125
Line 27 smaller of line 17 and line 20 $3,400 -> Form 1040 line 28The per-child cap binds here, not the earned income test: line 17 stops at the smaller line 16b figure rather than the unused credit on line 16a, so part of the credit is never delivered. The child tax credit is small for a separate reason, the limit set by tax on line 13 (IRS, Schedule 8812 (Form 1040) (2025)).
What the Code Actually Says
The form’s numbers are not the Code’s numbers. Section 24(d)(1) sets the refundable increase as the lesser of two figures, the second turning on the greater of 15 percent of earned income above $3,000 or, for a taxpayer with 3 or more qualifying children, the excess of social security taxes over the section 32 credit. Section 24(h)(6) then substitutes $2,500 for $3,000, and section 24(h)(5) caps the refundable amount per qualifying child at $1,400, a cap that section 24(i)(1) indexes for years after 2024 (26 U.S.C. 24).
The indexed figures are the ones the forms carry. For tax year 2025 the maximum child tax credit is $2,200 per qualifying child and the maximum ACTC is $1,700 (IRS, Instructions for Schedule 8812 (Form 1040) (2025)), and Rev. Proc. 2025-32 holds both at those same amounts for taxable years beginning in 2026 (IRS, Rev. Proc. 2025-32).
What Holds the Refund
The delay on these returns is statutory, not administrative. Section 6402(m) bars any credit or refund of an overpayment for a taxable year before the 15th day of the second month following the close of that year where a credit is allowed under section 24 by reason of subsection (d), or under section 32 (26 U.S.C. 6402).
The IRS states the working version of the same rule: it cannot issue those refunds before mid-February, and the hold applies to the entire refund, not only the portion tied to the credit (IRS, Child Tax Credit). A firm that says this at intake spends a minute in January instead of an hour in February.
What a Preparer Has to Check
Beginning in tax year 2025 the filer must have a social security number valid for employment and issued before the return’s due date to claim either credit, and on a joint return only one filer needs one (IRS, Instructions for Schedule 8812 (Form 1040) (2025)). The child tax credit group also sits inside the paid preparer due diligence duty that Form 8867 carries (IRS, Form 8867 (Rev. November 2024)), and what that duty demands is set out in american opportunity tax credit.
Common Questions
Four things have to be true at once: a filer with a social security number valid for employment, a qualifying child under age 17 with one as well, a child tax credit larger than the tax it can offset, and earned income of at least $2,500 (IRS, Child Tax Credit).
The child tax credit (CTC) and the ACTC are one credit split by refundability, and the return shows that split as position. The nonrefundable part is the CTC on Form 1040 line 19, and the refundable part is the ACTC on line 28 with the payments (IRS, Schedule 8812 (Form 1040) (2025)).
Because there was not enough tax for the child tax credit to reduce. Line 14 holds the nonrefundable credit down to the tax available, so a filer with little or no liability takes a small amount there, or nothing at all, and the rest comes through Part II-A (IRS, Schedule 8812 (Form 1040) (2025)). A return showing only the refundable credit is the ordinary result of a low tax bill, not a mistake.
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