The Additional Child Tax Credit (ACTC) is a tax credit available to eligible taxpayers in the United States who have children and qualify for the Child Tax Credit (CTC). The ACTC is designed to provide additional financial assistance to low and moderate-income families with children. It is a refundable credit, meaning that if the credit amount exceeds the taxpayer’s federal income tax liability, the excess can be refunded to the taxpayer.

Here are key points related to the Additional Child Tax Credit:

1. **Child Tax Credit (CTC):**
– The Child Tax Credit (CTC) is a non-refundable tax credit available to taxpayers with qualifying dependent children under the age of 17. The CTC was expanded as part of the Tax Cuts and Jobs Act (TCJA) in 2017.

2. **Refundability of the Additional Child Tax Credit:**
– If a taxpayer’s CTC is more than the amount of income tax they owe, up to $1,400 per qualifying child can be refunded as the Additional Child Tax Credit.

3. **Qualifying Criteria:**
– To qualify for the ACTC, taxpayers must meet certain criteria, including having earned income of at least $2,500 and meeting specific income limits. The credit amount is phased out for higher-income taxpayers.

4. **Calculation of the Credit:**
– The ACTC is calculated as 15% of the taxpayer’s earned income above $2,500, up to the maximum credit amount of $1,400 per qualifying child.

5. **Earned Income Requirement:**
– Taxpayers must have earned income to be eligible for the ACTC. Earned income includes wages, salaries, and self-employment income.

6. **Non-Refundable Portion of the CTC:**
– The non-refundable portion of the Child Tax Credit is limited to $2,000 per qualifying child. This portion can only offset federal income tax liability and cannot be refunded.

7. **Phase-Out Limits:**
– The availability of the ACTC is subject to phase-out limits based on the taxpayer’s modified adjusted gross income (MAGI). The phase-out begins at higher income levels.

8. **Filing Status:**
– Taxpayers can claim the Additional Child Tax Credit when filing their federal income tax return using Form 1040 or 1040A. It cannot be claimed on Form 1040EZ.

9. **Other Dependent Credit (ODC):**
– The TCJA introduced the Other Dependent Credit (ODC) for dependents who do not qualify for the Child Tax Credit. The ODC is non-refundable and provides a credit of up to $500 per dependent.

It’s important for taxpayers to carefully review the eligibility criteria and income limits to determine whether they qualify for the Child Tax Credit and, if applicable, the Additional Child Tax Credit. Tax laws and credits can change, so it’s advisable to consult with a tax professional or refer to the most recent tax regulations for accurate and up-to-date information.