For those who’re a father or mother or guardian submitting taxes, chances are high you’ve heard of the Baby Tax Credit score (CTC) — and possibly the Extra Baby Tax Credit score (ACTC), too. However what’s the distinction between the CTC and ACTC? How have you learnt which one applies to you, and how will you declare them?

Right here’s your breakdown of CTC vs. ACTC, together with how every one works, which filers qualify in keeping with the Inner Income Service (IRS), and the way they have an effect on your tax refund.

What’s the Baby Tax Credit score (CTC)?

The CTC is a tax credit score that helps cut back your tax invoice primarily based on the variety of qualifying kids you’ve got. The credit score is partially refundable, so in case your credit score is greater than the taxes you owe, you would possibly nonetheless obtain some a reimbursement as a refund.

For 2024, the credit score was price as much as $2,000 per baby. For 2025, the One Huge Lovely Invoice Act (OBBA) elevated the credit score to $2,200 per baby.

To qualify for the CTC:

• You should declare the kid as a dependent in your return (you supplied no less than half of their monetary help).
• The kid have to be a U.S. citizen, nationwide, or resident alien and have a Social Safety quantity (SSN).
• You should meet sure revenue limits.

Learn our full Baby Tax Credit score (CTC) information.

What’s the Extra Baby Tax Credit score (ACTC)?

The ACTC is the refundable portion of the Baby Tax Credit score. If the CTC reduces your taxable revenue to zero and you continue to have unused credit score left, you might be able to get that leftover quantity as a refund by means of the ACTC. For tax yr 2024, the utmost refundable quantity was $1,700 per qualifying baby. For tax yr 2025, the ACTC quantity is $1,400 per qualifying baby as a consequence of OBBBA modifications.

To qualify for the ACTC:

• You should meet all CTC eligibility necessities.
• Your earned revenue for the yr have to be no less than $2,500.

Learn our full Extra Baby Tax Credit score (ACTC) information.

CTC vs. ACTC: What are the variations?

Consider the ACTC as an add-on or backup to the CTC. For those who qualify for the complete CTC and don’t want the ACTC, nice! You’ve seemingly already shaved an enormous chunk off your tax invoice.

However for those who can’t use the complete CTC since you owe little to no tax, the ACTC kicks in and might put a reimbursement in your pocket (in contrast to a nonrefundable tax credit score, which may solely cut back your tax legal responsibility to zero). This issues lots when you have decrease revenue or extra youngsters than tax legal responsibility.

Baby Tax Credit score vs. Extra Baby Tax Credit score at a look

Right here’s a fast side-by-side take a look at the CTC vs. ACTC:

Who can declare each?

Many taxpayers qualify for each the CTC and ACTC in the identical tax yr. For instance, for those who’re eligible for the complete credit score of $2,200 in 2025 however solely owe $1,000 in taxes, you’ll use $1,000 of the credit score to scale back your legal responsibility to zero. Chances are you’ll then be eligible to say the remaining $1,200 as a refundable credit score by means of the ACTC. 

How you can declare the CTC and ACTC

Excellent news! Once you use TaxAct® to arrange your tax return, we’ll information you thru the method of figuring out your eligibility and calculating each credit.

You don’t have to file separate varieties to say each credit. Simply file your federal revenue tax return and fill out the suitable sections in your Type 1040, and our tax preparation software program will do the remainder. Right here’s how:

1. TaxAct will robotically calculate how a lot of the CTC and ACTC you’re eligible for primarily based in your AGI, submitting standing (single, joint filer, and so forth.), variety of dependents, and tax scenario.
2. For those who qualify for a refund by means of the ACTC, TaxAct makes certain you get it.
3. We’ll additionally assist you to full Schedule 8812, Credit for Qualifying Youngsters and Different Dependents, which is required to say both credit score. 

FAQs

The underside line

Right here’s a easy strategy to bear in mind the distinction between the Baby Tax Credit score and the Extra Baby Tax Credit score:

• The CTC helps cut back the tax you owe.
• The ACTC helps you get a reimbursement in case your tax invoice isn’t excessive sufficient to make use of the complete CTC.

And sure, you may qualify for each tax breaks!

Need assistance claiming these credit? TaxAct makes it straightforward. Our step-by-step steerage ensures you don’t miss out on both credit score — we can assist you file quick, securely, and with confidence.

This text is for informational functions solely and never authorized or monetary recommendation.

All TaxAct provides, services are topic to relevant phrases and circumstances.