How Are the Child Tax Credits Different?

Updated for tax year 2023.

Wondering how the Child Tax Credit (CTC) works for your 2023 taxes? Here are the main things to note:

• Max credit amount:

  The Child Tax Credit’s maximum amount is still $2,000 per child (unchanged from 2022).

• Child’s age:

  Children must be under age 17 to qualify for the credit in tax year 2023.

• Refundability:

  Up to $1,500 of the Child Tax Credit is refundable for 2023, meaning you can claim up to that amount as a tax refund even if you don’t owe any income tax.

• Advance monthly payments:

  There were no advance monthly payments for the CTC in 2023.

• Income phaseout threshold:

  The credit amount you qualify for starts decreasing once your modified adjusted gross income (MAGI) hits a certain threshold: $400,000 for joint filers or $200,000 for all other filers.

Child Tax Credit (CTC) vs. Additional Child Tax Credit (ACTC) in 2023

The Additional Child Tax Credit (ACTC) is the refundable part of the Child Tax Credit. For 2023, this amounted to $1,500. This means if you owed less income tax than the credit amount, you could qualify to claim the Additional Child Tax Credit (ACTC).

The CTC continues to determine your eligibility for the ACTC. If you don’t qualify for the CTC, you can’t take the ACTC. To determine if you’re eligible, you can fill out Schedule 8812.

The Child and Dependent Care Credit

Looking for more information on the Child and Dependent Care Credit? Check out Form 2441 FAQs: The Child and Dependent Care Credit.

This article is for informational purposes only and not legal or financial advice.