How to Calculate the Child Tax Credit — Step by Step

The formula, in one paragraph

The Child Tax Credit for tax year 2026 is $2,200 for each qualifying child under 17, plus $500 for each other dependent. The credit falls by $50 for every $1,000 — or fraction of $1,000 — of modified adjusted gross income over $200,000 for single filers and $400,000 for married filing jointly. The part that cuts your tax bill is nonrefundable; the part that pays out even when the bill is zero is refundable, up to $1,700 per child, and it is 15% of earned income over $2,500. The credit is claimed on Schedule 8812, and the child needs a valid Social Security number.

Step 1: Count the children and the other dependents

A qualifying child is under 17 at the end of the year, lives with you for more than half the year, and has a valid Social Security number. Other dependents are older children, parents or relatives you support — they are worth $500 each, and that $500 is nonrefundable, so it can only cut a tax bill, never pay out. At the example numbers there are 2 children and 0 other dependents, so the count is 2.

Step 2: Work out the gross credit

Multiply the children by $2,200 and the other dependents by $500, then add. Two children are $4,400.00. One child and two other dependents are $2,200 + $1,000 = $3,200.00. Three children are $6,600.00. This is the credit before the phase-out and before the split — the biggest number on the page, and the one that shrinks in the next two steps.

Step 3: Apply the income phase-out

Find the threshold for your filing status — $200,000 single, $400,000 married filing jointly — and subtract it from your modified adjusted gross income. Divide what is left by $1,000 and round UP to the next whole number: a fraction counts as a whole increment. Multiply by $50. That is the reduction, and it cannot be more than the gross credit. A married couple on $120,000 is under the line, so the reduction is $0.00. A single filer on $250,000 is $50,000 over, which is 50 increments, so the reduction is $2,500.00 and the credit is $1,900.00. A single filer on $200,500 is $500 over — one fraction — so the reduction is just $50.00 and the credit is $4,350.00.

Step 4: Split refundable from nonrefundable

The other-dependent part comes off first and is always nonrefundable. What is left is the child part. The nonrefundable piece of it is the smaller of the child part and your tax liability minus the other-dependent part. The refundable piece is the smaller of three numbers: what is left of the child part, $1,700 per child, and 15% of your earned income over $2,500. At the example numbers the tax bill is $5,000, so the whole $4,400.00 child part is nonrefundable and the refundable part is $0.00. With no tax bill at all, the refundable part on $60,000 of earned income is $3,400.00 — two children at $1,700 each — and $1,000.00 of the credit is lost.

Step 5: Work out what you actually receive

Add the other-dependent part you could use, the nonrefundable child part and the refundable part. That is the total received, and the credit minus the received is the credit lost. Divide the received by 12 for the monthly value. The example family receives $4,400.00, or $366.67 a month, and loses nothing. The zero-liability family receives $3,400.00, or $283.33 a month, and loses $1,000.00. The family on $8,000 of earned income receives $825.00, or $68.75 a month, and loses $3,575.00.

What NOT to do

Do not claim a child without a valid Social Security number — the credit is $0.00 for that child, not $2,200. Do not assume your adjusted gross income is your modified adjusted gross income if you have foreign earned income; that is the main case where the two differ, and the phase-out uses the modified number. Do not count on the refundable part without earned income: the $2,500 floor means a family with no earned income gets $0.00 refundable, however many children it has.

That box is the whole formula.