Refundable versus nonrefundable credits
A nonrefundable credit can reduce modeled income tax to zero but does not by itself create a refund. A refundable credit can exceed certain tax liability limits when its separate eligibility formula is met.
Withholding refunds and refundable credits are different concepts. A taxpayer can receive withheld money back even when a particular credit is nonrefundable.
Child Tax Credit and Other Dependent Credit
The Child Tax Credit generally depends on a qualifying child, age, relationship, residency, support, identification, and other tests. Other qualifying dependents may support a smaller Other Dependent Credit.
The simplified 2025 model uses $2,200 per qualifying child under 17 and $500 per other qualifying dependent, then applies the income phaseout and regular-tax limit.
Why EITC and refundable ACTC need separate models
EITC depends on earned income, adjusted gross income, filing status, qualifying children, investment income, age, residency, identification, and disqualifying circumstances.
Refundable ACTC uses earned-income and child-count mechanics. Applying a flat amount without those tests would create false refunds.
Worked phaseout example above $400,000
Dependent credit limitations
Related calculators
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Frequently asked questions
Why can the calculator show less credit than the headline per-child amount?
Income phaseouts and the nonrefundable regular-tax limit can reduce the amount applied.
Why is EITC excluded?
EITC needs a dedicated eligibility and earned-income model. A flat estimate could create a false refund.
Primary sources
Afterax uses official IRS material where available and names other authorities when a cross-state comparison is required.
- IRS Child Tax Credit overview
- IRS Schedule 8812 and instructions
- IRS Earned Income Tax Credit guidance
Rules can change, and eligibility depends on facts not captured by a general guide. Confirm the current form instructions before filing or making a material transaction.
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