A tax-year 2026 return is generally filed in 2027. Returns lodged during 2026 mostly cover tax year 2025, so check which year's figures you're reading. At the time of writing, the IRS 2026 Schedule 8812 is posted, but the 2026 instructions are still marked as a draft, so confirm details against the final version before filing.
This guide covers the 2026 amounts, qualifying-child rules, phase-outs, refundability, filing steps and the traps for Australia-based U.S. taxpayers.
Key Takeaways
- 2026 maximums: CTC $2,200 and ACTC $1,700 per child; ODC $500 per dependent.
- The ACTC is the refundable part of the CTC, not an extra payment on top of it.
- Modified AGI, tax liability and earned income can all shrink what you receive.
- FEIE or housing exclusion claims bar the ACTC.
- Confirm each child's employment-valid SSN before filing.
What Are the 2026 Schedule 8812 Credit Amounts?
All dollar figures here are in U.S. dollars, because they are what the IRS applies. Convert to Australian dollars only for your own budgeting.
| Credit | 2026 maximum | Refundable? |
|---|---|---|
| CTC | $2,200 per qualifying child under 17 | Partly, through the ACTC |
| ACTC | $1,700 per qualifying child | Yes |
| ODC | $500 per other dependent | No |
The 2026 Child Tax Credit amount
The IRS 2026 Schedule sets the CTC at up to $2,200 for each qualifying child under age 17 at the end of the year. Rev. Proc. 2025-32 confirms the figure. The One Big Beautiful Bill Act (Public Law 119-21) raised it from $2,000 and made the framework permanent, with future cost-of-living adjustments.
Schedule 8812 multiplies $2,200 by your number of qualifying children. Phase-outs and tax-liability limits come after that.
The 2026 Additional Child Tax Credit amount
The refundable ACTC is capped at $1,700 per qualifying child. That cap is part of the $2,200, not added to it. Your actual refund can be lower because of:
- Earned income (see the formula below)
- How much of the CTC your tax liability already absorbed
- Eligibility rules, including SSN requirements
The Credit for Other Dependents
The ODC is $500 per dependent who isn't a CTC qualifying child. Typical cases are a 17-year-old, a full-time student over 17, or a dependent parent. The $500 is nonrefundable. It cuts your tax to zero but never produces a refund, so don't treat it as interchangeable with the ACTC.
Income phase-outs and reduced credits
The CTC and ODC begin to phase out when modified AGI exceeds:
- $400,000 for married filing jointly
- $200,000 for every other filing status
Round the excess up to the next $1,000, then multiply by 5%. That is a $50 reduction per $1,000 over the threshold.
Illustrative example: A single parent with one child has modified AGI of $205,300. The excess is $5,300, rounded up to $6,000. The reduction is $300, so the $2,200 credit falls to $1,900.
What changed or continued for 2026
The $2,200 CTC is indexed for taxable years beginning after 2025, and increases are rounded down to the next $100. The ACTC cap has its own indexing, which produced the $1,700 figure. The $500 ODC has no indexing formula in the current statute (26 U.S.C. section 24). The statute, the IRS inflation release and the schedule itself are more reliable than tax-software summaries.
Who Qualifies for the 2026 Child Tax Credit and ACTC?
The qualifying-child tests
A child must pass every test, not just one or two:
- Relationship: your son, daughter, stepchild, eligible foster child, sibling or a descendant of one. Adopted children and children lawfully placed for adoption count as your own.
- Age: under 17 on 31 December 2026.
- Residency: lived with you more than half the year.
- Support: did not provide more than half of their own support.
- Joint return: did not file a joint return, other than one filed only to claim a refund of withheld tax.
- Dependency and status: claimed as your dependent and a U.S. citizen, national or resident alien.
- SSN: an employment-valid Social Security number issued by the return due date, including extensions.
Age rules, including 14-year-olds and newborns
Age is tested at year-end. A child who turns 17 on 31 December 2026 misses the CTC but may still qualify you for the ODC.
A 14-year-old can be your qualifying child. Whether they must file their own return depends on their income, not their age. Check the final IRS instructions for 2026 dependent filing thresholds rather than reusing 2025 figures.
A child born during the year generally counts as living with you for more than half the year if your home was theirs for more than half the time they were alive. If a child born and lost in 2026 has no SSN, the draft instructions ask you to attach a birth certificate, death certificate or hospital record showing a live birth.
SSN, ITIN and ATIN requirements
For the CTC and ACTC, the child needs an employment-valid SSN. For joint filers, at least one spouse needs a valid SSN, and the other needs an SSN or ITIN. An ITIN or ATIN does not replace the child's SSN for these two credits. It can satisfy the identification requirement for the ODC.
Residency, custody and separated parents
If both parents could claim a child, the tie-breaker rules apply:
- A parent beats a nonparent.
- Between parents, the one the child lived with longer wins.
- If nights are equal, the parent with the higher AGI wins.
A custodial parent can release the claim using Form 8332. The noncustodial parent attaches it for each year claimed. Form 8332 covers the CTC, ACTC and ODC.
Records to keep
Records support your claim but don't replace the tests. Keep:
- SSN documents and birth or adoption papers
- School or medical records showing where the child lived
- Custody orders and signed Form 8332 copies
- Support records such as housing, utilities, clothing and medical costs
Non-English records may need accurate English translations. That matters for Australia-based families whose documents come from several countries.
How Does Schedule 8812 Calculate the 2026 Credits?
Schedule 8812 applies the credit in a fixed order. Complete each step before moving on.
1. Start with the potential credit
Multiply qualifying children by $2,200, and other dependents by $500. A household with three children under 17 and one 18-year-old starts at $6,600 plus $500, or $7,100, before any limits.
2. Apply the modified AGI phase-out
Line 1 starts with Form 1040 line 11b. Schedule 8812 then adds back:
- Excluded Puerto Rico income
- Amounts from Form 2555 (lines 45 and 50)
- Form 4563 line 15
Compare the total with your threshold, round the excess up to the next $1,000, multiply by 5%, and subtract the result from the preliminary credit.
Illustrative example: A married couple with two children and modified AGI of $420,000 start at $4,400. The excess is $20,000, so the reduction is $1,000 and the credit is $3,400.
3. Separate nonrefundable CTC from refundable ACTC
The nonrefundable CTC and ODC reduce your federal income tax, but only down to zero. Whatever is left of the CTC may be refundable through the ACTC, calculated separately.
4. Earned-income and foreign-income considerations
The ACTC formula is earned income minus $2,500, multiplied by 15%, capped at $1,700 per child.
For Australia-based filers, the Form 2555 rule is the biggest trap. The IRS Form 2555 instructions say that claiming the foreign earned income exclusion or the foreign housing exclusion or deduction bars the ACTC.
A Foreign Tax Credit (Form 1116) route may keep the refundable credit available, so compare both before choosing. Taxes allocable to excluded income can't also be credited.
Illustrative calculation scenarios
These are examples only, not predictions of any individual refund.
- Below the threshold: A couple earning $150,000 with two children claims the full $4,400, subject to tax liability.
- Limited tax liability: $4,400 CTC with $1,500 tax and $30,000 earned income. Nonrefundable CTC uses $1,500; ACTC is $2,900 (under the $3,400 cap and $4,125 earned-income result).
- Above the threshold: See the $420,000 example above.
- Child ages out: A 17-year-old on 31 December 2026 loses the $2,200 CTC but may carry a $500 ODC.
How to Complete Schedule 8812 and Claim the Credit
Gather the required information first
Have these ready:
- Form 1040 and your filing status
- Dependents' names, dates of birth and SSNs
- Your own SSN or ITIN details
- Income records for modified AGI and earned income
- Form 2555 and Form 1116 details, if relevant
Complete the dependent section of Form 1040 first. Schedule 8812 builds on those entries.
Complete the relevant parts and worksheets
The 2026 schedule has four sections:
- Part I: CTC and ODC
- Part II-A: ACTC for all filers
- Part II-B: ACTC for filers with three or more qualifying children and bona fide Puerto Rico residents
- Part II-C: the ACTC calculation
Use only the 2026 form and its final instructions. Line numbers shift between years, and 2025 line references can mislead.
Transfer the results and review before filing
The CTC and ODC flow to line 19 of Form 1040, 1040-SR or 1040-NR. The ACTC flows to line 28. Before filing:
- Match every name and SSN exactly to IRS records. A misspelling can reject an e-file.
- Make sure no one else has already used a child's SSN. A duplicate triggers a rejection.
- Keep supporting documents with your records.
If you missed an eligible credit, Form 1040-X can correct it. A retroactive CTC or ACTC claim still requires that the child had an SSN valid for employment issued by the original due date, including extensions.
Refund timing is separate from eligibility. The IRS holds the entire refund, not just the ACTC portion, until mid-February. IRS draft instructions point to mid-February 2027, which is not a guaranteed payment date.
Australia-Based Taxpayers: International Issues and Common Mistakes
Considerations for U.S. taxpayers living in Australia
U.S. citizens and resident aliens report worldwide income on their U.S. return, wherever they live. Australian tax residency and Australian returns need a separate analysis.
Points that matter for the credit:
- Filing date: Living abroad usually brings an automatic extension to 15 June for calendar-year returns; Form 4868 can extend it to 15 October. Interest on unpaid tax still runs from 15 April.
- Currency: Report amounts in U.S. dollars, using the rate when income was received or paid. The yearly average rate can work for income earned evenly through the year.
- Treaty: The U.S.-Australia treaty savings clause lets the U.S. tax its citizens as if the treaty did not apply. Article 22 still allows a U.S. credit for Australian income tax paid by a U.S. citizen resident in Australia.
Living in Australia doesn't disqualify you from the ACTC. The Form 2555 exclusions do.
Mistakes that reduce or delay the credit
- Using 2025 figures ($2,000 CTC, 2025 filing thresholds) for 2026
- Treating the ACTC as extra money on top of the full CTC
- Using an ITIN where an employment-valid SSN is required
- Entering SSNs or names that don't match IRS records
- Ignoring the modified AGI addbacks
- Claiming a child who is also claimed on another return
- Overlooking custody rules or a missing Form 8332
Before filing, check the latest IRS form, final instructions and inflation release.
Where VJM Global fits
Coordinating a U.S. return with Australian accounting and tax obligations can get complicated, especially if you're weighing the FEIE against the Foreign Tax Credit.
VJM Global supports U.S. individual taxpayers with Form 1040 and 1040-NR preparation, and provides cross-border accounting and international tax planning for clients worldwide.
If you want a second opinion on how your overseas income interacts with the credits, a consultation is a reasonable starting point.
Frequently Asked Questions
What are the instructions for completing Schedule 8812 on Form 1040?
Complete the dependent section of Form 1040 first, then work through the Schedule 8812 parts and worksheets for the CTC, ODC and ACTC. Carry the results to Form 1040 as the current instructions direct.
What's the Schedule 8812 child tax credit?
Schedule 8812 calculates the CTC, ACTC and ODC for qualifying children and other dependents. The final amount depends on eligibility, modified AGI, tax liability and earned income.
Do 14-year-olds need to pay taxes?
Not because of age alone. A teenager's own filing requirement depends on their income, while your right to claim them for the CTC depends on the qualifying-child tests. Check the 2026 thresholds before assuming either way.
Can I claim the Additional Child Tax Credit if I live in Australia?
Living in Australia doesn't automatically rule you out. Your filing status, the qualifying-child rules, SSNs, earned income and modified AGI all matter. Claiming the Form 2555 exclusions would bar the ACTC.
Is Schedule 8812 required for every Child Tax Credit claim?
Schedule 8812 is the form used to calculate the CTC, ACTC and ODC, and the instructions tell you to attach it to your return. Confirm how your filing method handles it using the current Form 1040 instructions.
