How the Child Tax Credit works in 2026
The Child Tax Credit reduces your federal income tax bill by $2,200 for each qualifying child under age 17 at the end of the tax year. A qualifying child must be your dependent, a U.S. citizen or resident, and have a valid Social Security number.
The credit is non-refundable up to the amount of your tax liability, meaning it can reduce what you owe to zero. The refundable portion — called the Additional Child Tax Credit — allows families to receive up to $1,700 per child as a refund even if they owe no tax.
For example, if you owe $800 in federal tax and have one qualifying child, the credit wipes out your tax bill and you receive up to $1,700 back as a refund — for a total benefit of $2,500.
Income phase-out thresholds for 2026
The Child Tax Credit begins to phase out at $400,000 of modified adjusted gross income for married filing jointly filers, and at $200,000 for all other filers. The credit reduces by $50 for every $1,000 of income above the threshold.
For most working families — including self-employed workers, freelancers, and small business owners — income levels fall well below the phase-out thresholds, meaning they qualify for the full $2,200 credit per child.
Child and Dependent Care Credit also increased
Separate from the Child Tax Credit, the One Big Beautiful Bill Act also increased the Child and Dependent Care Credit. The maximum credit percentage rose from 35% to 50% of qualifying expenses for lower-income families.
You can claim eligible childcare expenses up to $3,000 for one qualifying dependent or $6,000 for two or more. The credit percentage ranges from 20% to 50% based on your adjusted gross income, with lower-income families receiving the higher percentage.
For a family with two children in daycare spending $6,000 on qualifying care, the maximum credit at the 50% rate is $3,000 — a meaningful reduction in the tax bill.
What self-employed parents should review
Self-employed workers with children often miss the full value of these credits because their income fluctuates and they may not track qualifying expenses carefully. RoboTax can connect to your accounts and surface childcare payments, dependent care FSA contributions, and other relevant expenses so a tax professional can confirm you are capturing every dollar.
If your self-employment income is high enough to affect the phase-out, a tax professional can also help you review strategies — such as increasing retirement contributions or HSA contributions — that reduce your modified AGI and preserve more of the credit.
Frequently asked questions
What is the Child Tax Credit amount for 2026?
$2,200 per qualifying child under age 17, up from $2,000. The refundable portion (Additional Child Tax Credit) is up to $1,700 per child.
What income level does the Child Tax Credit phase out at?
The credit phases out at $400,000 for married filing jointly filers and $200,000 for all other filers. The credit reduces by $50 for every $1,000 above the threshold.
Is the Child Tax Credit refundable in 2026?
Partially. The non-refundable portion reduces your tax bill to zero. The refundable Additional Child Tax Credit can return up to $1,700 per child even if you owe no tax.
Does the Child Tax Credit apply to self-employed workers?
Yes. Self-employed workers, freelancers, and small business owners with qualifying children can claim the same $2,200 credit as W-2 employees, subject to the same income phase-out rules.
Sources and further reading
These resources are included for educational context. RoboTax is not tax, legal, or financial advice, and this content should be reviewed with a qualified tax professional before being used for filing decisions.