Last week, I received a message from a friend asking why their calculator showed 0 when the child tax credit had increased to $2,200.

At first, I thought it might be due to high income. However, after talking, it turned out to be an issue with their identification numbers.

Both the husband and wife were filing taxes using an ITIN instead of an SSN, even though their child was born in the U.S. and has an SSN.

This change is part of the One Big Beautiful Bill Act, or OBBBA, passed last summer. Not only did the amount increase, but an additional eligibility requirement was added.

First, let's clarify the amount. The maximum credit is $2,200 per child under 17, effective for the 2025 tax year.

The amount remains the same for the 2026 tax year at $2,200. This figure is confirmed in the IRS's inflation adjustment announcement, Rev. Proc. 2025-32, released last fall.

Although inflation adjustments were made, I wondered why it didn't increase. It turns out the structure rounds to the nearest $100, so it hasn't crossed the threshold yet. It feels like missing out by just one lottery number.

Of this amount, the refundable portion, known as ACTC, is a maximum of $1,700 per child. This is the same for both 2025 and 2026.

However, the refundable amount only accumulates at 15% of the income earned over $2,500. This means you need to have earned income to receive a refund.

There is also an income limit. If your adjusted gross income exceeds $200,000 for individuals or $400,000 for married couples filing jointly, the amount gradually decreases based on how much you exceed those limits.

Up to this point, this information is well-known. The real trap lies ahead.

There are surprisingly many households diligently filing taxes with an ITIN, so I wanted to emphasize this point. It's crucial to check the eligibility requirements before focusing on the amount.

Originally, a child was required to have a valid SSN. If a child only has an ITIN, they are not eligible for the $2,200 credit and instead qualify for a $500 other dependent credit.

Newly added is the requirement for the parents. The taxpayer claiming the credit must also have a valid SSN.

If filing jointly, only one spouse needs to have an SSN. The other can have an ITIN, but it must be issued before the filing deadline.

Conversely, if both spouses have ITINs, they cannot claim the $2,200 credit even if the child has an SSN. This was exactly the case for my friend's family.

The valid SSN mentioned here cannot just be any number. According to IRS standards, it must be an SSN that allows for employment and must be issued before the filing deadline, including extensions.

Therefore, an SSN marked with a restriction on employment may not meet this requirement. I recommend that those in the process of changing their status check their cards.

So, does this mean my friend's family is left with nothing? Not necessarily. If they can claim the child as a dependent, they can still consider the $500 other dependent credit.

Of course, there is a significant difference between $2,200 and $500. If they have two children, that's $3,400 that could be lost, which surprised me when I saw the numbers.

Now, let's talk about timing. The deadline for 2025 filings, including extensions, ended on October 15 of last year.

This means the focus now should be on the 2026 tax filing happening next spring. There's still some time until the end of the year, making it a good opportunity to review documents.

If the process for obtaining a green card is underway and an SSN is expected soon, the key is whether the issuance date is before the deadline. This should be monitored alongside the immigration paperwork progress.

For families with a newborn, make sure to check if the SSN application was submitted at the time of birth registration. Delays in receiving the number can complicate the filing schedule.

And if the tax program shows a 0, don't just overlook it; investigate why it shows 0 by checking each line. My friend's family found the reason right away on Schedule 8812.

Honestly, whether this condition is fair is subjective. Some may feel frustrated that they pay the same taxes but miss out on benefits, while others may see it as aligned with the system's intent.

Personally, I believe understanding where your paperwork stands is more beneficial than engaging in that debate. They say luck favors the prepared.

The advice I gave my friend was simple. First, check who among the couple can receive an SSN and when, and if uncertain, take the documents to a tax professional.

Every household has different immigration and income situations, leading to varied outcomes. If unsure, always verify with a tax expert.

As the weather gets colder, it seems this year will pass quickly. I think checking each SSN card before the end of the year is the best financial strategy for this winter.