Can H1B Visa Holders Claim the Child Tax Credit?

H1B Visa Holders Claim the Child Tax Credit

The short answer is yes, but with one massive “catch” that often catches Indian families off guard. While you are eligible as an H1B holder, your child’s eligibility depends entirely on which nine-digit number is printed on their tax ID card.

For the 2026 filing season (covering the 2025 tax year), the rules have become even more critical due to the increased credit amounts introduced by the One Big Beautiful Bill (OBBB).

1. The $2,200 “SSN Requirement”

The most important rule for the Child Tax Credit (CTC) is that the qualifying child must have a Social Security Number (SSN) that is valid for employment in the U.S.

• The Amount: For 2025, the credit has increased to $2,200 per child (up from $2,000).
• The Problem for H-4s: Many children of H1B holders are on H-4 visas and hold an ITIN (Individual Taxpayer Identification Number) instead of an SSN.
• The Ruling: If your child only has an ITIN, they do not qualify for the $2,200 Child Tax Credit. This is a common source of disappointment for Indian families whose children were born in India rather than the U.S.

2. The $500 “Consolation” Credit (ODC)

If your child has an ITIN and doesn’t qualify for the full CTC, all is not lost. You can still claim the Credit for Other Dependents (ODC).

• The Amount: This is a non-refundable credit of $500 per dependent.
• Who it’s for: It covers dependents with ITINs, children over age 17, or elderly parents living with you in the U.S. who meet the residency tests.

3. Income Phase-Outs for 2025/2026

The OBBB maintained the high income thresholds for these credits, which is great news for high-earning H1B professionals.

• Married Filing Jointly: The credit only starts to decrease once your Modified Adjusted Gross Income (MAGI) exceeds $400,000.
• Single/Other Filers: The phase-out begins at $200,000.
• The Math: For every $1,000 you earn over the limit, your credit is reduced by $50.

CTC vs. ODC Comparison

4. Refundability and the “Additional” Credit

One major update for 2026 is the Additional Child Tax Credit (ACTC). If the $2,200 credit brings your tax bill down to zero, you can actually get the “leftover” money back as a refund.

• Limit: Up to $1,700 of the CTC is refundable for the 2025 tax year.
• Requirement: You must have earned income of at least $2,500 to qualify for this refundable portion.

5. The “Trump Savings Account” Bonus

New for 2026 filings: If you have a child born between 2025 and 2028 who is a U.S. citizen (and therefore has an SSN), the federal government may provide a one-time $1,000 contribution to a new custodial “Trump Savings Account.” This is in addition to the annual tax credits.

How KKCA Secures Your Status

Navigating the gap between $2,200 and $500 requires precise filing. At KKCA, we help you:

• SSN/ITIN Strategy: We advise on when to apply for an SSN (if eligible) versus an ITIN to ensure you don’t miss the filing deadline.
• Schedule 8812 Optimization: We accurately calculate the refundable portion (ACTC) so you get the maximum cash back in your pocket.
• Transition Planning: If your child recently received an SSN, we can help you amend previous years’ returns to claim the higher credit if applicable.

Call to Action

Looking for personalized tax services about your specific tax situation, please contact us. We are here to help you with your specific tax matters.

Frequently Asked Questions (FAQ)

Q: My child has an H-4 EAD and an SSN. Can I claim the $2,200 credit? A: Yes. As long as the SSN is valid for employment and was issued before the tax deadline, they qualify for the full Child Tax Credit.

Q: Can I claim the credit if I am a Non-Resident Alien (1040-NR)? A: Generally, no. Most tax credits, including the CTC, are only available to Resident Aliens. However, some exceptions apply under the U.S.-India treaty for students, we recommend a professional review.

Q: What if my child turns 17 during 2025? A: If they are 17 on December 31, 2025, they no longer qualify for the $2,200 CTC. They will automatically move to the $500 Credit for Other Dependents (ODC).

Q: Can I claim my child who lives in India? A: No. To be a “qualifying child,” they must have lived with you in the U.S. for more than half the year.

Disclaimer

This blog is intended for informational purposes only and does not constitute legal or tax advice. Please consult a qualified U.S. CPA or tax attorney for guidance specific to your situation.