IRC 24 Child Tax Credit: OBBBA $2,200 Credit, Parent SSN Requirement, Form 8867 Due Diligence -- Practitioner Guide

The One Big Beautiful Budget Act (OBBBA) made the most consequential changes to the IRC 24 child tax credit since the Tax Cuts and Jobs Act of 2017 (TCJA). For practitioners handling returns with dependent children, OBBBA has three major impacts: a higher credit amount, a higher refundable ACTC floor, and a new statutory requirement that the claiming taxpayer (parent) must hold a valid Social Security Number. The parent SSN requirement is a screening obligation that now belongs in every preparer's intake workflow before Form 8867 is completed.

This guide is written for enrolled agents, CPAs, and tax attorneys preparing individual returns for clients with dependent children. It covers the pre-OBBBA baseline, all OBBBA changes and their effective dates, the new parent SSN requirement and its due diligence implications, Schedule 8812 mechanics, mixed-status family screening, and a practical intake checklist. All statutory citations and credit amounts must be verified against IRC 24 as amended by OBBBA and current IRS.gov guidance before reliance in any specific client matter.

Section 1: Pre-OBBBA Baseline (Tax Years 2017 Through 2024)

TCJA Enhancements Under IRC 24(a) (2018 Through 2025)

Before OBBBA, the most recent major changes to the child tax credit were made by TCJA in 2017. TCJA temporarily raised the CTC to $2,000 per qualifying child under IRC 24(a) for tax years 2018 through 2025 (the TCJA provisions were scheduled to sunset after December 31, 2025, reverting to the pre-TCJA $1,000 per child). OBBBA permanently replaced this structure before the sunset could occur.

For tax year 2024 (the last pre-OBBBA tax year that was fully in effect under TCJA), the applicable amounts were:

• CTC (non-refundable portion, IRC 24(a)): $2,000 per qualifying child.
• ACTC (refundable portion, IRC 24(d)): $1,600 per qualifying child for tax year 2024 (inflation-adjusted from the $1,400 TCJA base).
• Phase-out: The credit phased out beginning at $200,000 of modified adjusted gross income (MAGI) for single filers and $400,000 of MAGI for married filing jointly under TCJA-era IRC 24(b)(2). These thresholds were not indexed for inflation under TCJA. Verify applicable thresholds for each tax year at IRS.gov.

Child SSN Requirement Under Pre-OBBBA Law (IRC 24(e))

Under pre-OBBBA law, IRC 24(e) required that each qualifying child have a valid Social Security Number (SSN) issued by the Social Security Administration that is valid for employment. A child with only an Individual Taxpayer Identification Number (ITIN) or an Adoption Taxpayer Identification Number (ATIN) did not satisfy this requirement and could not be used as a qualifying child for CTC purposes. This rule was enacted by TCJA and applied for tax years 2018 and later.

Critically, under pre-OBBBA law, there was no statutory requirement that the claiming taxpayer (the parent or guardian) hold an SSN. A parent with only an ITIN could potentially claim the CTC provided the qualifying child had a valid SSN. OBBBA changed this by adding a new SSN requirement for the claiming taxpayer, discussed in detail in Section 3 below.

TCJA Sunset That OBBBA Replaced

Without legislative action, TCJA's IRC 24 enhancements would have expired after December 31, 2025. For tax year 2026 (the first year after the TCJA sunset), the CTC would have reverted to $1,000 per child, the ACTC floor would have changed, and the $400,000 MFJ phase-out threshold would have reverted to $110,000. OBBBA prevented this sunset entirely by enacting a new, permanent IRC 24 structure. The OBBBA amounts and rules govern all tax years beginning on or after the OBBBA effective date; verify the exact effective date against the enacted OBBBA text and IRS.gov.

Section 2: OBBBA Changes to IRC 24 -- Credit Amounts, Phase-Out, and Permanence

CTC Raised to $2,200 Per Qualifying Child

OBBBA amended IRC 24(a) to raise the child tax credit to $2,200 per qualifying child, per IRC 24 as amended by OBBBA. Beginning with tax year 2026, this amount is inflation-indexed, meaning the credit amount will increase annually based on the applicable inflation adjustment under IRC 24 as amended. Verify the current-year credit amount at IRS.gov before preparing any return; do not rely on the $2,200 base amount for tax years after 2026 without confirming the inflation-adjusted figure.

ACTC Raised to $1,700 Per Qualifying Child (2026)

OBBBA also amended IRC 24(d) to raise the Additional Child Tax Credit (the refundable portion) to $1,700 per qualifying child for tax year 2026, per IRC 24(d) as amended by OBBBA. Like the CTC, the ACTC amount is inflation-indexed beginning in 2026. Verify the current-year ACTC amount at IRS.gov and against IRC 24(d) as amended; the inflation-adjusted figure applies in any year after 2026.

Phase-Out Thresholds: Hedge to IRS.gov

The CTC phases out at $50 per $1,000 of MAGI above the applicable threshold under IRC 24(b)(2) as amended by OBBBA. OBBBA modified the phase-out thresholds from the TCJA amounts. The specific dollar thresholds for each filing status are set in IRC 24(b)(2) as amended; do not state specific threshold amounts without verifying against IRS.gov and the applicable tax year's guidance, because the thresholds may be subject to inflation adjustment or may differ from TCJA thresholds. For every client return, confirm the applicable phase-out threshold at IRS.gov before computing the phase-out reduction on Schedule 8812.

OBBBA Makes the CTC Permanent

Under OBBBA as enacted, the $2,200 CTC (inflation-indexed) and $1,700 ACTC (inflation-indexed) are permanent under current law. There is no scheduled sunset provision as there was under TCJA. This is the first time since the child tax credit was created in 1997 that the credit has been made permanent at an enhanced level. For planning purposes, practitioners can project the credit forward without a near-term expiration, while recognizing that Congress retains full authority to amend or repeal the IRC at any time.

Section 3: The New Parent SSN Requirement (Critical -- Read Before Preparing Any CTC Return)

The Two-Layer SSN Rule Under OBBBA

Under OBBBA, both of the following SSN requirements must be satisfied to claim the CTC:

• Qualifying child SSN (IRC 24(e), pre-existing rule, unchanged by OBBBA): Each qualifying child must have a valid Social Security Number issued by the Social Security Administration that is valid for employment. An ITIN or ATIN does not satisfy this requirement for the child.
• Claiming taxpayer SSN (IRC 24 as amended by OBBBA, new requirement): The taxpayer claiming the CTC must also have a valid Social Security Number. A parent or guardian who files with only an ITIN does not meet this requirement and cannot claim the CTC, regardless of whether the qualifying child has a valid SSN.

The addition of the parent SSN requirement is the single most operationally significant OBBBA change for practitioners serving mixed-status families, immigrant communities, and any population where ITIN filings are common. Before any CTC claim is made on a return, the preparer must confirm that the taxpayer (and, on a joint return, the position of each spouse) satisfies the SSN requirement as set out in IRC 24 as amended and current IRS.gov guidance.

Due Diligence Obligations Under IRC 6695(g) and Form 8867

IRC 6695(g) requires paid tax return preparers to meet due diligence requirements when claiming the child tax credit, the Additional Child Tax Credit, the earned income tax credit, the American Opportunity Tax Credit, and the head of household filing status. The due diligence requirement is not optional; it applies to every paid preparer who prepares a return (or claims a refund) that includes the CTC or ACTC.

Due diligence under IRC 6695(g) requires the preparer to:

• Complete and file Form 8867 (Paid Preparer's Due Diligence Checklist) with the return.
• Complete the applicable worksheet(s) or otherwise compute the credit or benefit correctly.
• Ask the questions required by Form 8867 and record the client's answers.
• Not know, or have reason to know, that any information used to determine eligibility is incorrect.

A paid preparer who fails to meet these requirements is subject to a penalty per return under IRC 6695(g) as amended. The penalty is inflation-adjusted annually; verify the current penalty amount at IRS.gov and against IRC 6695(g) as amended before relying on any figure published in prior-year materials. The penalty applies per credit, per return, which means a single return that improperly claims both the CTC and the earned income credit can trigger multiple separate penalties.

Form 8867 Part IV: The Parent SSN Screening Question

Form 8867 Part IV covers the child tax credit and additional child tax credit due diligence requirements. Following OBBBA, the parent SSN screening question has been added as a required component of Part IV. Practitioners must verify the claiming taxpayer's SSN status as part of the Form 8867 completion workflow -- not after the fact, but as a threshold eligibility screen before any CTC is entered on the return.

The practical workflow is: confirm the taxpayer's Social Security Number at intake (by inspecting the Social Security card or SSA documentation), then confirm each qualifying child's SSN, then proceed to complete Form 8867. If the taxpayer presents only an ITIN (a nine-digit number that begins with 9), the parent SSN requirement under IRC 24 as amended is not met and the CTC cannot be claimed. Do not enter a CTC on the return in that circumstance.

Hedge all specific Form 8867 line-level mechanics to the current Form 8867 instructions published at IRS.gov; the IRS revises the form annually and the OBBBA-related updates to Part IV must be followed in the current version of the form.

Section 4: Mixed-Status Family Situations

A mixed-status family, for purposes of this guide, is one where one spouse has a valid SSN and the other has only an ITIN. These situations create complex filing decisions that interact with the new parent SSN requirement under IRC 24 as amended by OBBBA. Practitioners must analyze these situations carefully and hedge all filing strategy recommendations to client-specific facts and current IRS.gov guidance.

Married Filing Jointly With One SSN and One ITIN

Where one spouse on a joint return holds a valid SSN and the other spouse holds only an ITIN, the question of whether the SSN-holding filer satisfies the parent SSN requirement for CTC purposes requires verification against current IRS.gov guidance and the specific language of IRC 24 as amended by OBBBA. Practitioners should not assume the SSN-holding spouse's SSN automatically satisfies the requirement for purposes of a joint return without confirming the applicable rule at IRS.gov and against the current Form 8867 instructions. Hedge all conclusions on this point to client-specific facts and current guidance.

Married Filing Separately Considerations

For mixed-status couples considering married filing separately (MFS), a key practical point is that MFS generally imposes less favorable phase-out thresholds than MFJ. Under IRC 24(b)(2) as amended by OBBBA, the MFJ phase-out threshold is higher than the MFS threshold (which mirrors the single-filer threshold); verify both thresholds at IRS.gov and against IRC 24(b)(2) as amended for the applicable tax year. A high-income SSN-holding spouse filing MFS rather than MFJ may face phase-out at a lower MAGI threshold.

In some mixed-status scenarios, the SSN-holding spouse filing MFS may preserve CTC eligibility (depending on the applicable rule for the joint return situation) while eliminating the ITIN-holding spouse from the return. However, MFS also triggers a range of other tax consequences (loss of certain deductions, potential impact on ACTC eligibility, and other effects) that must be modeled in full before recommending that filing strategy. Do not recommend a specific filing strategy without analyzing the full tax picture and hedging to client-specific facts and IRS.gov.

IRC 6013(g) Election for Nonresident Alien Spouses

Where one spouse is a nonresident alien, the couple may elect under IRC 6013(g) to have the nonresident alien spouse treated as a U.S. resident for income tax purposes. This election allows the couple to file a joint return, which may affect CTC eligibility under the parent SSN framework. However, the interaction of the IRC 6013(g) election with the new parent SSN requirement under IRC 24 as amended by OBBBA is fact-specific and must be verified against the current text of IRC 6013(g), IRC 24 as amended, and IRS.gov guidance before any planning is undertaken. The CTC interaction with IRC 6013(g) is not fully resolved in publicly available guidance as of the date of this guide; hedge all conclusions to IRS.gov and applicable guidance.

Section 5: Qualifying Child Rules (Pre-Existing, Not Changed by OBBBA)

The qualifying child requirements under IRC 24(c) are pre-existing statutory rules. OBBBA did not change these tests. A child must satisfy all of the following requirements to be a qualifying child for CTC purposes. Cite IRC 24(c) for each requirement and verify against current IRS.gov guidance.

Age Test

The child must be under age 17 at the end of the tax year (IRC 24(c)(1)). A child who turns 17 on December 31 of the tax year does not qualify for that year. Practitioners should verify the child's date of birth at intake to confirm the age test is met.

Relationship Test

The child must be the taxpayer's son, daughter, stepson, stepdaughter, foster child, or a descendant of any of them (including a grandchild), or the taxpayer's brother, sister, stepbrother, stepsister, or a descendant of any of them (IRC 24(c)(2) cross-referencing IRC 152(d)(2)). Verify the specific relationship categories against IRC 24(c) and IRS.gov guidance.

Dependent Test

The child must be claimed as a dependent on the taxpayer's return (IRC 24(c)(1)(A)). A child who is properly the dependent of another taxpayer (for example, under a multiple support agreement, a divorce decree, or a Form 8332 release of claim) cannot also be used as a qualifying child by a different taxpayer for CTC purposes.

Residency Test

The child must have lived with the taxpayer for more than half of the tax year (IRC 24(c)(1)(B) cross-referencing IRC 152). Temporary absences (for school, illness, military service, or similar reasons) generally do not break the residency test, but the determination is fact-specific. Confirm the residency standard against the IRC 152 definition and IRS.gov guidance.

Social Security Number Test for the Child (IRC 24(e))

The qualifying child must have a valid Social Security Number issued by the Social Security Administration that is valid for employment (IRC 24(e)). An ITIN or ATIN is not a valid SSN for this purpose. This requirement was enacted by TCJA and applies for tax years 2018 and later. OBBBA did not change this rule. A child who has only an ITIN does not satisfy IRC 24(e) and cannot be a qualifying child for the CTC.

For children born during the tax year, the SSN must be issued before the due date of the return (including extensions) for the child to be a qualifying child for that year. Verify timing requirements against current IRS.gov guidance.

Section 6: Schedule 8812 Walkthrough

The child tax credit and the Additional Child Tax Credit are both computed on Schedule 8812 (Credits for Qualifying Children and Other Dependents). All references to Schedule 8812 line numbers and mechanics must be verified against the current Schedule 8812 instructions at IRS.gov; the form is revised annually to reflect any legislative changes and inflation adjustments.

Part I: Child Tax Credit Computation

Part I of Schedule 8812 determines the total child tax credit and the credit for other dependents before phase-out. The practitioner enters the number of qualifying children who meet all of the requirements under IRC 24(c) and IRC 24(e), including both the child SSN requirement and (on the main return) the parent SSN requirement under IRC 24 as amended by OBBBA. The credit amount per qualifying child ($2,200 per IRC 24 as amended by OBBBA; verify the current-year inflation-adjusted amount at IRS.gov) is multiplied by the number of qualifying children to produce the initial credit.

Phase-Out Computation

If the taxpayer's MAGI exceeds the applicable phase-out threshold under IRC 24(b)(2) as amended by OBBBA (hedge the specific threshold amounts to IRS.gov for the applicable tax year), the CTC is reduced by $50 for each $1,000 (or fraction thereof) of MAGI above the threshold. This phase-out computation is performed in Schedule 8812 and reduces the credit available to higher-income taxpayers.

Practitioners advising high-income clients with children should note that the CTC phase-out and the SALT deduction cap (IRC 164(b)(6)) can both affect the same client in the same year. For a detailed analysis of the SALT deduction cap as changed by OBBBA, see the guide referenced in the Related Guides section below.

Part II: Additional Child Tax Credit (ACTC) Computation

Part II of Schedule 8812 determines the refundable ACTC. The ACTC applies when the CTC computed in Part I exceeds the taxpayer's tax liability. Rather than simply losing the excess credit, eligible taxpayers can receive up to $1,700 per qualifying child (for 2026, per IRC 24(d) as amended by OBBBA; inflation-indexed, verify at IRS.gov) as a refundable credit.

The ACTC is limited by the taxpayer's earned income; an earned income threshold applies, and taxpayers with earned income below the threshold will have their ACTC limited accordingly. Hedge the minimum earned income threshold to IRS.gov and the current Schedule 8812 instructions; the IRS publishes this figure in the applicable year's forms and instructions. Taxpayers with zero earned income generally cannot claim the ACTC.

Section 7: Additional Child Tax Credit (ACTC) -- The Refundable Portion

The Additional Child Tax Credit is the mechanism that makes a portion of the IRC 24 credit refundable. It matters most for taxpayers with dependent children whose tax liability is less than the total child tax credit they would otherwise be entitled to. Without the ACTC, excess CTC is simply lost; with the ACTC, a portion of the excess is returned as a refund.

ACTC Amount Under OBBBA

Under IRC 24(d) as amended by OBBBA, the ACTC is $1,700 per qualifying child for tax year 2026 (inflation-indexed). The ACTC is capped at the CTC amount per qualifying child (you cannot receive more as a refund than you were otherwise entitled to as a credit). Verify the current-year ACTC amount at IRS.gov; do not rely on $1,700 for tax years after 2026 without confirming the inflation-adjusted figure at IRS.gov.

Earned Income Test

The ACTC is conditioned on the taxpayer having earned income above a minimum threshold. Taxpayers with earned income below the threshold will have their ACTC limited to a percentage of their earned income above the threshold (under the formula in IRC 24(d) as amended). Hedge the specific minimum earned income threshold to IRS.gov and the current Schedule 8812 instructions; the IRS publishes this figure annually and it is subject to change.

Earned income for ACTC purposes generally includes wages, salaries, tips, and net self-employment income, but excludes passive income and investment income. Confirm the definition of earned income for ACTC purposes against the applicable IRC 24(d) provision and current IRS.gov guidance.

Combat Pay Election (IRC 112)

Members of the U.S. Armed Forces may elect under IRC 112 to include combat pay in earned income for purposes of the earned income credit computation. This election also affects the ACTC computation, because combat pay that is elected into earned income increases the ACTC base. The decision to make the IRC 112 election is client-specific and must be modeled for each military family. Hedge all specifics of the combat pay election and its ACTC interaction to IRS.gov and the current Schedule 8812 instructions; the interaction is fact-specific and software-driven.

Section 8: OBBBA Makes the Enhanced CTC Permanent

One of the most significant structural changes OBBBA made to IRC 24 is the elimination of the scheduled sunset that would have caused the TCJA CTC enhancements to expire after December 31, 2025. Under OBBBA as enacted, the $2,200 CTC (inflation-indexed) and the $1,700 ACTC (inflation-indexed) are permanent under current law: they have no scheduled expiration date.

For practitioners, permanence matters for long-range planning conversations with clients who have young children. The credit is projected forward under current law without a near-term legislative cliff, which simplifies multi-year financial planning that accounts for the child tax credit as a recurring benefit through the child's 17th birthday.

However, practitioners should note that permanence under current law is not a guarantee that the credit will remain unchanged. Congress retains full authority to amend, reduce, or repeal any provision of the IRC. The child tax credit has been modified by legislation in 1997, 2001, 2003, 2010, 2017, and now 2025 (OBBBA effective date); another future modification remains possible. Monitor legislative developments and verify the applicable credit amounts at IRS.gov each filing season.

Section 9: Practical Intake Checklist for Tax Preparers

Before claiming the child tax credit or the Additional Child Tax Credit on any return, a practitioner should confirm each of the following items. This checklist does not substitute for the Form 8867 due diligence process; it is a pre-filing screen designed to catch eligibility issues before the return is completed. Hedge all items to current Form 8867 instructions, IRC 24 as amended, and IRS.gov guidance.

• Age: Is each qualifying child under age 17 at year-end? Verify the child's date of birth. A child who turns 17 on or before December 31 of the tax year does not qualify for that year (IRC 24(c)(1)).
• Child SSN: Does each qualifying child have a valid SSN (not an ITIN)? Request and inspect the Social Security card or SSA documentation for each qualifying child. An ITIN disqualifies the child under IRC 24(e).
• Parent SSN: Does the claiming taxpayer have a valid SSN (not an ITIN)? This is the new OBBBA requirement under IRC 24 as amended. Inspect the taxpayer's Social Security card or SSA documentation. If the taxpayer has only an ITIN, the CTC cannot be claimed. On a joint return, verify the SSN status of both spouses and hedge to IRS.gov for joint filing rules.
• Dependent: Is the child claimed as a dependent on this return? Confirm the child is not the qualifying dependent of another taxpayer. Check for a Form 8332 release of claim if the parents are divorced or separated.
• Residency: Did the child live with the taxpayer for more than half the year? Document the residency facts. Confirm temporary absences (school, illness, etc.) under the IRC 152 rules do not break the residency test.
• Form 8867: Has Form 8867 been completed for this return? Form 8867 must be filed with every return claiming the CTC or ACTC. Complete Part IV of Form 8867 using the current version of the form from IRS.gov, including the parent SSN screening question.
• Due diligence: Have IRC 6695(g) requirements been met for this return? Confirm the applicable worksheet or computation has been completed correctly, the client questions were asked and documented, and no information on the return is known or suspected to be incorrect. Verify the current penalty amount for due diligence failures at IRS.gov.

Frequently Asked Questions

Common questions from enrolled agents, CPAs, and tax attorneys on the OBBBA child tax credit changes and Form 8867 due diligence.

Related Practitioner Guides

The following guides cover OBBBA provisions and related tax rules that practitioners should consider alongside the IRC 24 child tax credit analysis.

• IRC 164 SALT Deduction Cap OBBBA Guide -- high-income clients facing the IRC 24 CTC phase-out are typically also affected by the SALT cap phase-down under IRC 164(b)(6); both limits converge at similar MAGI thresholds and are frequently analyzed together.
• IRC 461(l) Excess Business Loss Limitation OBBBA Practitioner Guide -- excess business losses affect adjusted gross income, which in turn affects MAGI for CTC phase-out purposes; self-employed clients and pass-through entity owners with significant business losses may see their MAGI reduced by excess business loss disallowance, affecting where they fall relative to the IRC 24(b)(2) phase-out threshold.
• Form 706 Estate Tax Return Portability and DSUE Practitioner Guide -- clients with children who are also engaged in estate planning face intersecting considerations; the CTC is a current-year return credit, while estate planning addresses wealth transfer across generations, but both analyses are relevant to high-income clients with dependent children.
• OBBBA Tips and Overtime Deduction Guide -- OBBBA added above-the-line deductions for qualifying tips and overtime pay; these deductions reduce AGI, which affects MAGI for CTC phase-out purposes and may move clients below the phase-out threshold, increasing the available child tax credit.
• IRC 530A Trump Accounts: Gift Tax and IRA Conversion Practitioner Guide -- OBBBA child-focused tax provisions; coordinating context for families evaluating IRC 530A alongside the child tax credit.
• IRC 170 OBBBA Charitable Deduction: Non-Itemizer and AGI Floor -- OBBBA non-itemizer charitable deduction mechanics, 0.5% AGI floor for itemizers, DAF exclusion, and carryforward elimination for tax year 2026.

Tax Software Built for Complex Individual Returns

Americas Tax has supported enrolled agents, CPAs, and tax attorneys handling child tax credit eligibility, Form 8867 due diligence, Schedule 8812 computations, and mixed-status family returns since 2001. Our team understands the OBBBA changes and the new parent SSN screening requirements practitioners face in 2026.