what is the additional child tax credit 
the additional child tax credit is the refundable portion of the child tax credit it can be claimed by families who owe the irs less than their qualified child tax credit amount since the child tax credit is non refundable the additional child tax credit refunds the unused portion of the child tax credit to the taxpayer up to a limit that changes with inflation the tax cuts and jobs act tcja increased the amount of the child tax credit to 2 000 and put a new limit on the refundable portion understanding the additional child tax credita tax credit is a benefit given to eligible taxpayers to help reduce their tax liabilities it reduces what you owe dollar for dollar for example if susan s tax bill is 5 550 but she qualifies for a 2 500 tax credit she will only have to pay 3 050 5 500 2 500 3 050 some tax credits are refundable meaning that you will receive a refund if the tax credit amounts to more than what you owe as tax so if susan s tax credit is 6 050 and is refundable she will be given a check for 500 6 050 5 550 500 depending on what tax group a taxpayer falls in they may be eligible to claim a tax credit for example taxpayers with children may qualify for the child tax credit which helps to offset the costs of raising kids for tax years through 2025 the child tax credit allows eligible tax filers to reduce their tax liability by up to 2 000 per child to be eligible for the child tax credit the child or dependent must child tax credit vs additional child tax creditthe child tax credit is non refundable which means the credit could reduce your bill to zero but any excess from the credit would not be refunded families who want to keep the unused portion of the child tax credit may be able to claim another available tax credit called the additional child tax credit the additional child tax credit is a refundable tax credit that families may qualify for in 2023 up to 1 600 of the child tax credit can be refundable for each qualifying child if certain conditions are met this refundable portion increases to 1 700 in 2024 to claim a refund filers must complete schedule 8812 example of the additional child tax creditbefore the tcja the irs allowed families with an annual income of more than 3 000 to claim a refund using the additional child tax credit the tax credit depended on how much the taxpayer earned and was calculated by taking 15 of the taxpayer s taxable earned income over 3 000 up to the maximum amount of the credit which was then 1 000 per child the total amount above 3 000 subject to annual adjustments for inflation was refundable for example say a taxpayer with two dependents qualified for the child tax credit their earned income was 28 000 which means income over 3 000 is 25 000 since 15 x 25 000 3 750 and 3 750 is greater than the maximum credit of 2 000 for two kids they would have received the full portion of any unused credit so if the taxpayer received an 800 child tax credit they would be refunded a 1 200 additional child tax credit however if the taxable earned income was 12 000 instead 15 of this amount over 3 000 is 1 350 15 x 9 000 1 350 because the refundable portion of the credit could not exceed 15 of earned income above 3 000 the taxpayer would receive a maximum refund of 1 350 not 2 000 the tax cuts and jobs act changed some aspects of the child tax credit by increasing the total credit amount from 1 000 to 2 000 and allowing the full credit for taxpayers with up to 200 000 in income 400 000 for married taxpayers filing jointly previously the credit began to phase out when income topped 75 000 for individuals or 110 000 for married couples filing jointly instead of allowing a refund of the full credit amount the tcja capped the refundable portion and indexed that limit to inflation refundable credits are limited to 15 of earnings above 2 500 the refundable portion of the additional child tax credit is 1 600 in 2023 and 1 700 in 2024 taxpayers who were residents of puerto rico with income below 3 000 were eligible before the tcja if they had at least three qualifying dependents and paid social security tax in excess of the amount of their earned income credit for the year now residents of puerto rico can be eligible with one qualifying dependent 