Child Tax Credit Changes in 2026: What Families Need to Know
The Child Tax Credit (CTC) is a major benefit for families, and changes expected in 2026 could affect eligibility, credit amounts, and tax planning strategies. Understanding these updates now can help parents and guardians maximize benefits and plan for upcoming tax filings.
Overview
The tax landscape has changed significantly with the passage of the One Big Beautiful Bill Act (OBBBA) in July 2025. This legislation averted the "tax cliff" originally scheduled for 2026 and instead established a new set of rules for families.
If you are planning your finances for the 2026 tax year (returns filed in 2027), here is the breakdown of what the Child Tax Credit (CTC) looks like under the current law.
1. Higher Credit Amounts
Under previous laws, the Child Tax Credit was set to drop to $1,000 per child in 2026. However, current law has permanently increased and protected this amount.
- Maximum Credit: $2,200 per child (up from $2,000 in previous years).
- Inflation Indexing: Starting in 2026, the $2,200 base amount will be adjusted annually for inflation. This ensures the credit’s value doesn't erode as the cost of living rises.
- Age Limit: The credit remains available for qualifying children under age 17.
2. Refundability: The "Additional" Credit
If your tax bill is zero, you can still receive a portion of the credit as a refund. This is known as the Additional Child Tax Credit (ACTC).
- Refundable Limit: Up to $1,700 per child can be received as a refund.
- Earnings Requirement: To qualify for the refundable portion, you must have earned income of at least $2,500. The refund phases in at a rate of 15% for every dollar earned above that threshold.
3. Income Limits and Phase-Outs
The 2025 legislation maintained the higher income thresholds, meaning most middle-class families will still qualify for the full amount. The credit begins to decrease (by $50 for every $1,000 of additional income) once you cross these MAGI (Modified Adjusted Gross Income) levels:
4. New Requirements and Related Benefits
Beyond the dollar amounts, there are two critical "fine print" changes families should notice:
- SSN Requirements: To claim the credit, both the child and at least one parent must have a valid Social Security Number (SSN). This is a stricter requirement than in some previous years.
- Credit for Other Dependents (ODC): If you have a child aged 17–18 or a full-time college student up to age 23, they don't qualify for the $2,200 CTC. However, you can claim a non-refundable $500 credit for them under the "Other Dependent" rule.