Every filing season, millions of taxpayers ask the same question:
“If the Child Tax Credit is $2,200, why am I only getting $1,700 back?”

This confusion happens every single year, and in 2026 it will be even more common because the Child Tax Credit (CTC) rules include two separate components that behave very differently on your tax return.

To understand why your refund may be $500 less than expected, you must know the difference between:

• The maximum Child Tax Credit (CTC) of $2,200, and
• The refundable portion, called the Additional Child Tax Credit (ACTC), capped at $1,700

Here is the clear, simple breakdown every taxpayer needs to understand before filing.

The Two Parts of the Child Tax Credit (CTC)

1. The Maximum Credit: $2,200

This is the full Child Tax Credit available per qualifying child under age 17.

But the IRS will only allow you to use the full $2,200 if you owe at least $2,200 in taxes after your standard deduction and other reductions.

If your tax liability is zero, you cannot use the nonrefundable portion of the credit.

That is where the second piece comes in.

2. The Refundable Portion (ACTC): $1,700

The Additional Child Tax Credit (ACTC) is the part that can come back to you as a refund, even if you owe no tax.

For 2026, the refundable ACTC is capped at:

$1,700 per child

This is the part that hits your refund.

The $500 Refund Gap Explained

Here is the exact source of confusion:

Many taxpayers think:

“I get $2,200 per child back as a refund.”
But in reality:

• $2,200 is the maximum total credit
• Only $1,700 of that is refundable
• The remaining $500 is nonrefundable, meaning:
  • You only get it if you owe taxes
  • It does not increase your refund
  • If your tax liability is zero, that $500 disappears

This is why refunds often fall $500 short of what parents expect.

Real-World Examples That Show How the Credit Works

Example 1: Zero Tax Liability

Tax owed before credits: $0
CTC Available: $2,200
Refundable ACTC allowed: $1,700

Refund Increase: $1,700
$500 disappears because it is nonrefundable

Example 2: Tax Liability of $300

Tax owed before credits: $300
CTC absorbs the $300
Remaining CTC: $1,900
Refundable ACTC: $1,700

Refund Increase: $1,700
$200 still disappears because you cannot refund the full nonrefundable portion

Example 3: Tax Liability of $2,200 or More

Tax owed: $2,200
CTC fully absorbs the $2,200 tax
Refundable ACTC: $0 (you used the full credit)

Refund Increase: $0
But you eliminated $2,200 of your tax bill instead.

Why Refunds Are Often Smaller Than Expected

Taxpayers expect:

$2,200 per child in refund money.

But what actually increases your refund is:

$1,700 refundable ACTC
Minus:
Any tax liability offset with the nonrefundable portion

If you owe no tax, you only get $1,700.
If you owe a little tax, the refundable part stays $1,700, but the nonrefundable piece reduces your tax bill instead of boosting your refund.

This is exactly why many people see:

• A $1,700 credit
• Not the full $2,200
• A $500 difference they weren’t expecting

How to Know What You Will Actually Receive

To estimate the real refund:

Step 1: Calculate your tax liability

If $0, you only get the refundable $1,700.

Step 2: Apply the CTC ($2,200 maximum)

This eliminates your tax liability first.

Step 3: Determine refundable amount

Maximum refundable ACTC = $1,700

Step 4: Compare your expectation with IRS rules

Your refund will never exceed the $1,700 refundable cap unless you have additional credits (EITC, education credits, etc.)

How the PATH Act Affects Your CTC Refund Date

Any return claiming ACTC is subject to the PATH Act hold:

• Refund cannot be issued before mid-February
• Even the nonrefundable portion is held until the freeze lifts
• WMR may not show a date until after February 15

If you expected a large refund from the CTC, understand that:

Filing early does not speed up the refund.

The law prevents early release.

• The Child Tax Credit is $2,200 per child, but only $1,700 is refundable
• The $500 difference is why refunds appear smaller than expected
• The refundable portion (ACTC) is what boosts your refund
• The nonrefundable portion only reduces tax owed
• PATH Act rules delay all ACTC refunds until mid-February

Once you understand the two-part structure, every number on your return finally makes sense.