Child Tax Credit 2027 — Refundable vs Non-Refundable Split

Calculate how much of your 2027 federal Child Tax Credit ($2,000 per qualifying child under 17) is non-refundable versus refundable (Additional Child Tax Credit, max $1,700 per child). Includes 15% earned-income test and AGI phase-out. Free, private, no sign-up.

Total 2027 CTC (refundable + non-refundable)
$0
$2,000 per child + $500 per other dependent
Non-refundable CTC
—
Offsets tax liability only
Refundable (ACTC)
—
Up to $1,700 per child
Other Dependent Credit
—
Non-refundable only
Item Amount (USD)
2027 CTC structure under OBBB: The Child Tax Credit remains $2,000 per qualifying child under 17, of which up to $1,700 per child is refundable as the Additional Child Tax Credit (ACTC). The refundable portion is limited to 15% of earned income over $2,500. The CTC phase-out begins at $200,000 AGI ($400,000 MFJ) and reduces the credit by $50 for each $1,000 over the threshold.
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How the 2027 Child Tax Credit splits between refundable and non-refundable

The federal Child Tax Credit (CTC) provides $2,000 per qualifying child under age 17 for tax year 2027. Part of the credit is non-refundable — it can only reduce your federal income tax liability to zero. The remainder, up to $1,700 per child for 2027, is refundable as the Additional Child Tax Credit (ACTC). If your tax liability is already zero, you can still receive the refundable portion as a cash refund.

The refundable ACTC is limited to 15% of your earned income above $2,500. That earned-income floor means very low-income filers with little or no wages cannot claim the full refundable amount. A single parent with two children but only $5,000 of earned income can claim a maximum ACTC of (5,000 − 2,500) × 15% = $375 total, regardless of the $3,400 maximum cap.

Order of credit application

For the calculation, start with your tax liability before any CTC. Apply the non-refundable CTC first to reduce tax liability down toward zero — this is the "tax-offset" portion. The remaining unused CTC (up to $1,700 per child) then becomes the ACTC, subject to the 15% earned-income test. The Credit for Other Dependents (ODC) of $500 per non-child dependent (e.g., parents, adult relatives) is purely non-refundable — it cannot become a refund.

Example: Single parent, two kids under 17, tax liability $3,200, earned income $35,000. Max CTC = $4,000 ($2,000 × 2). Non-refundable portion absorbs the full $3,200 liability, leaving $800 unused. ACTC cap is $3,400 ($1,700 × 2) — the smaller of the leftover $800 and (35,000 − 2,500) × 15% = $4,875 is $800. So the filer receives $3,200 in tax offset + $800 as refund = $4,000 total CTC, with no remaining ODC.

2027 phase-out and OBBB context

Both the non-refundable and refundable portions of the CTC phase out for higher-income filers. The phase-out begins at $200,000 AGI for single/HoH filers and $400,000 AGI for married filing jointly. For every $1,000 (or fraction) of AGI over the threshold, the total CTC is reduced by $50. A married couple with three kids and AGI of $450,000 has total CTC of $2,000 × 3 = $6,000, reduced by ($450,000 − $400,000) / $1,000 × $50 = $2,500. Final credit: $3,500.

The 2021 American Rescue Plan briefly expanded the CTC to $3,600 (under 6) / $3,000 (6–17) and made the whole credit fully refundable. That expansion expired after 2021. OBBB did not restore it — the structure remains the 2018 TCJA $2,000 design, with $1,700 refundable for 2026 and $1,700 for 2027 after inflation indexing. Several Congressional proposals to expand CTC are pending but not enacted.

Source: irs.gov — Publication 972 and Schedule 8812 instructions. Updated May 2026 reflecting OBBB (P.L. 119-21) inflation indexing for 2027.

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