If you’re a parent or guardian filing taxes, chances are you’ve heard of the Child Tax Credit (CTC) — and maybe the Additional Child Tax Credit (ACTC), too. But what’s the difference between the CTC and ACTC? How do you know which one applies to you, and how can you claim them?
Here’s your breakdown of CTC vs. ACTC, including how each one works, which filers qualify according to the Internal Revenue Service (IRS), and how they affect your tax refund.
What is the Child Tax Credit (CTC)?
The CTC is a tax credit that helps reduce your tax bill based on the number of qualifying children you have. For 2024 and 2025, it’s worth up to $2,000 per child and partially refundable.
To qualify for the CTC:
- You must claim the child as a dependent on your return (you provided at least half of their financial support).
- The child must be a U.S. citizen, national, or resident alien and have a Social Security number (SSN).
- You must meet certain income limits.
Read our full Child Tax Credit (CTC) guide.
What is the Additional Child Tax Credit (ACTC)?
The ACTC is the refundable portion of the Child Tax Credit. If the CTC reduces your taxable income to zero and you still have unused credit left, you may be able to get that leftover amount as a refund through the ACTC — up to $1,700 per qualifying dependent for tax years 2024 and 2025.
To qualify for the ACTC:
- You must meet all CTC eligibility requirements.
- Your earned income for the year must be at least $2,500.
Read our full Additional Child Tax Credit (ACTC) guide.
CTC vs. ACTC: What are the differences?
Think of the ACTC as an add-on or backup to the CTC. If you qualify for the full CTC and don’t need the ACTC, great! You’ve likely already shaved a big chunk off your tax bill.
But if you can’t use the full CTC because you owe little to no tax, the ACTC kicks in and can put money back in your pocket (unlike a nonrefundable tax credit, which can only reduce your tax liability to zero). This matters a lot if you have lower income or more kids than tax liability.
Child Tax Credit vs. Additional Child Tax Credit at a glance
Here’s a quick side-by-side look at the CTC vs. ACTC:
| Feature | Child Tax Credit (CTC) | Additional Child Tax Credit (ACTC) |
Type of credit | Partially refundable | Fully refundable |
Maximum credit amount per child | $2,000 | Up to $1,700 (if part of CTC is unused) |
Purpose | Reduces your tax bill | Refunds some or all of unused CTC |
Income threshold | Begins to phase out at modified adjusted gross income (MAGI) above $200,000 (single filers) or $400,000 (married filing jointly) | Earned income must be at least $2,500 |
Purpose | Reduces tax liability | Provides refund if CTC exceeds tax liability |
Who can claim both?
Many taxpayers qualify for both the CTC and ACTC in the same tax year. For example, if you’re eligible for the full credit of $2,000 but only owe $400 in taxes, you’ll use $400 of the credit to reduce your liability to zero. You may then be eligible to claim the remaining $1,600 as a refundable credit through the ACTC.
How to claim the CTC and ACTC
Good news! When you use TaxAct® to prepare your tax return, we’ll guide you through the process of determining your eligibility and calculating both credits.
You don’t need to file separate forms to claim both credits. Just file your federal income tax return and fill out the appropriate sections on your Form 1040 and our tax preparation software will do the rest. Here’s how:
- TaxAct will automatically calculate how much of the CTC and ACTC you’re eligible for based on your AGI, filing status (single, joint filer, etc.), number of dependents, and tax situation.
- If you qualify for a refund through the ACTC, TaxAct makes sure you get it.
- We’ll also help you complete Schedule 8812, Credits for Qualifying Children and Other Dependents, which is required to claim either credit.
FAQs
Can I claim the ACTC if I don’t qualify for the full CTC?
Yes, if you have earned income of at least $2,500 and don’t receive the full CTC due to low tax liability, you may qualify for a refund through the ACTC. The higher your earned income, the more of the ACTC you can receive (the refundable amount is up to $1,700 per child).
Is the ACTC a separate credit from the CTC?
Not exactly. The ACTC is technically part of the CTC (the refundable portion). It’s not something you qualify for on its own — the ACTC only comes into play if you can’t claim the full CTC because your tax bill isn’t high enough.
Think of it like this:
- The CTC reduces your tax bill.
- The ACTC gives you a refund of what’s left over (up to a limit) if you meet the income requirements.
Do I need to fill out a separate form for the ACTC?
Nope! You don’t need to file a different form just for the ACTC. Both the Child Tax Credit and the Additional Child Tax Credit are calculated using Schedule 8812, which is attached to your Form 1040.
If you’re filing with TaxAct, our software will take care of the math and figure out how much of your CTC is refundable as the ACTC. Just follow the prompts and answer questions about your income and dependents — we’ll handle the rest.
Will the CTC or ACTC change in 2025?
It’s possible. As of now, the credit amounts and rules are staying the same for the 2025 tax year. However, Congress could change things. Keep an eye out for updates, and rest easy knowing TaxAct stays on top of all the tax law changes for you.
The bottom line
Here’s a simple way to remember the difference between the Child Tax Credit and the Additional Child Tax Credit:
- The CTC helps reduce the tax you owe.
- The ACTC helps you get money back if your tax bill isn’t high enough to use the full CTC.
And yes, you can qualify for both tax breaks!
Need help claiming these credits? TaxAct makes it easy. Our step-by-step guidance ensures you don’t miss out on either credit — we can help you file fast, securely, and with confidence.