26 U.S.C. § 24 — Child tax credit

(a) Basic credit. Taxpayers get a $1,000 tax credit for each "qualifying child" they can claim as a dependent. (b) Limits. (1) The credit shrinks (but never below zero) by $50 for every $1,000, or part of $1,000, that "modified adjusted gross income" goes over a threshold amount. "Modified adjusted gross income" means adjusted gross income plus any income excluded because it came from Puerto Rico, U.S. territories, or similar foreign-source exclusions. (2) The threshold is $110,000 for a joint return, $75,000 for an unmarried person, or $55,000 for a married person filing separately; marital status follows the usual tax-law rules. (c) "Qualifying child." (1) This generally means a "qualifying child" under the standard dependent-child definition who is under 17. (2) It doesn't include certain noncitizen children who wouldn't count as dependents once a specific residency-related exception is set aside. (d) Refundable portion. (1) The total credits a taxpayer can claim increase by the smaller of two amounts: what this credit would be without this refundability rule and without the usual tax-liability cap, or how much more credit the taxpayer would get if that cap were raised by the greater of 15% of the taxpayer's earned income above $3,000, or — for a taxpayer with 3 or more qualifying children — however much their Social Security taxes exceed their earned income tax credit. This refundable amount isn't treated as an ordinary credit and instead reduces what's otherwise allowed under subsection (a). Combat pay excluded from income still counts as earned income for this calculation. (2) "Social security taxes" means payroll taxes on wages, plus half of self-employment tax, plus half of railroad retirement tax paid during the year, minus any taxes the taxpayer is entitled to have refunded under a special multiple-employer rule; equivalent payments under certain international Social Security agreements count too. (3) This refundability doesn't apply to a taxpayer who elects to exclude foreign earned income for that year. (e) ID requirements. (1) No credit for a qualifying child unless the taxpayer includes that child's name and taxpayer ID number on the return, issued by the return's due date. (2) No credit at all if the taxpayer's own ID number was issued after the due date. (f) Full-year requirement. No credit for a tax year covering less than 12 months, unless the year is short because the taxpayer died. (g) Restrictions after improper prior claims. (1) No credit is allowed for 10 years after a final finding that a prior claim was based on fraud, or for 2 years after a final finding that it was due to reckless or intentional disregard of the rules (without fraud). (2) If a taxpayer was denied the credit through the normal audit process, they get no credit in later years unless they give the IRS the information needed to show they now qualify. (h) Special rules for tax years after 2017. (1) These rules — paragraphs (2) through (7) — apply for years starting after December 31, 2017. (2) The credit becomes $2,200 instead of $1,000. (3) The income threshold becomes $400,000 for a joint return, $200,000 otherwise. (4) The credit also increases by $500 for each dependent (like an elderly parent or older child) who isn't a "qualifying child" — except this doesn't apply to the same excluded noncitizens as in (c)(2), and a qualifying child denied the main credit for lacking a Social Security number under paragraph (7) still counts toward this $500 credit. (5) The maximum refundable amount per qualifying child is capped at $1,400, figured without the $500 dependent add-on. (6) For the refundable-credit earned-income floor, $2,500 replaces the usual $3,000 figure. (7) No credit unless the return includes the taxpayer's Social Security number (or at least one spouse's, on a joint return) and the qualifying child's Social Security number — meaning a number issued by the Social Security Administration to a U.S. citizen or under specific other Social Security Act provisions, and issued before the return's due date. (i) Inflation adjustments. (1) For tax years after 2024, the $1,400 refundable cap rises each year using the standard cost-of-living formula, based on 2017 rather than 2016. (2) For tax years after 2025, the $2,200 credit amount similarly rises, based on 2024 rather than 2016. (3) Any increase is rounded down to the nearest $100. (j) Reconciling the credit with advance payments. (1) The credit is reduced, not below zero, by however much the taxpayer already received in advance monthly payments during the year; failing to make this reduction is treated as a math error the IRS can fix automatically. (2) If advance payments exceeded the actual credit, the taxpayer's tax goes up by the excess — also treated as a math error — but this extra tax is reduced by a "safe harbor" amount for lower-income taxpayers (income at or below 200% of a set threshold), phased out proportionally above the threshold. The threshold is $60,000 for joint filers or surviving spouses, $50,000 for heads of household, and $40,000 for everyone else. The safe harbor equals $2,000 times the number of "extra" qualifying children counted in the advance payments but not in the actual year-end credit. (k) Applying the credit in U.S. territories. (1) For territories that copy the U.S. tax code ("mirror code" territories), the Treasury must pay the territory the revenue it loses because of this credit, for years after 2020, based on information from that territory's government; no credit is allowed to someone who gets an equivalent credit from the territory itself. (2) Puerto Rico: for 2021, refundability and no-advance-payment rules are addressed elsewhere in the tax code; for years after 2021, a bona fide Puerto Rico resident can claim the credit, and the "3 or more qualifying children" condition for the Social Security tax comparison doesn't apply to them. (3) American Samoa: Treasury pays American Samoa an estimate of what residents would have gotten had this section applied there, but only if American Samoa has a Treasury-approved plan to promptly pass the money to residents; if a plan is approved, this section otherwise doesn't apply to eligible residents directly, and if no plan is approved, rules similar to the Puerto Rico rules apply instead. (4) These territorial payments are treated the same as refunds from other federal credit programs for budget-accounting purposes.

The record shows that this section was added by Public Law 105–34, title I, § 101(a), enacted August 5, 1997, and originally published at 111 Stat. 796. The source credit further indicates that the section has been amended on approximately two dozen subsequent occasions, spanning Public Laws enacted from 1998 through 2025, including major revisions in 2001, 2015, 2017, 2021, and 2025. This pattern of frequent amendment reflects a provision that has been repeatedly adjusted—in credit amount, income thresholds, refundability, and identification requirements—over nearly three decades. Public Law 105–34 is the Taxpayer Relief Act of 1997, a broad tax measure enacted during a period of federal budget surplus negotiations between the Clinton administration and a Republican-controlled Congress. The Act is generally understood to have introduced several new tax benefits for individuals and families, including the child tax credit itself, as part of a broader package addressing income tax relief, capital gains, and estate tax provisions. The commonly cited purpose of the original child tax credit was to reduce the federal income tax burden on families with dependent children, though the specific legislative reasoning behind particular design choices—such as the initial credit amount or income phase-out thresholds—is not established by the source credit alone. The extensive subsequent amendment history suggests that the credit became a recurring vehicle for economic stimulus, tax relief, and other policy adjustments across multiple Congresses, but the specific intent behind each amendment is not documented here. This note does not speculate as to the purposes of those later changes.