The Internal Revenue Service announced that the child tax credit for the 2027 tax year will increase by $100, moving from $2,200 to $2,300 per qualifying child. At the same time, the refundable portion climbs to $1,800, up from $1,700. These adjustments align with the inflation indexing that took effect under the Working Families Tax Cuts, marking the first time the credit has grown solely because of inflation.
Taxpayers whose fiscal year ends in 2027 will see the new amounts reflected on returns filed in early 2028. The 2027 figures do not apply to the spring-2027 filing season, which still uses the 2026 numbers. Families that want the higher credit reflected in their 2027 paychecks can submit an updated Form W-4 in January.
What the 2027 credit looks like
The credit now provides a maximum of $2,300 for each child younger than 17 who possesses a valid Social Security number. For a household with two children, the total possible credit rises from $4,400 to $4,600; three children can generate up to $6,900. The refundable portion, the amount that can be received even if the family owes no tax, is capped at $1,800 per child. To claim the full refundable amount, a family with one child must earn at least $14,500 in wages; two children require $26,500, and three children need $38,500.
How the refundable portion is calculated
The refundable portion follows a formula that awards 15 % of earned income above $2,500, up to the per-child cap of $1,800. For example, a single parent earning $20,000 and claiming two children will see a refundable credit of $2,625, which is the same as in 2026 because the parent’s earnings do not exceed the threshold needed for the higher cap. Families with three or more children may also qualify via an alternative method based on Social Security taxes paid.
Eligibility rules that stay unchanged
All core eligibility criteria from previous years remain intact. The child must be under 17 at the end of the tax year and have an employment-eligible Social Security number. The credit phases out once modified adjusted gross income exceeds $200,000 for single filers or heads of household and $400,000 for married couples filing jointly. The phase-out reduces the credit by $50 for every $1,000 of income above these limits. A non-qualifying dependent, such as a 17-year-old student, can still generate a $500 credit for “other dependents.”
Practical steps for taxpayers
When filing for 2027, the credit is claimed on Schedule 8812. Tax-preparation software should support the updated amounts; however, some free tiers, like TaxSlayer’s Simply Free, do not incorporate the child tax credit, so users must verify coverage before filing. Adjusting Form W-4 in January can ensure that the higher credit is reflected in paycheck withholding. Finally, families should be aware that refunds containing the credit are subject to the PATH Act hold, which may delay the disbursement.
