When I enter the ITIN of my kids on the system the tax credit get reduced to 500$? Why this is happening?

The child tax credit is only available for children with social security numbers.

 

To qualify for the Child Tax Credit, your child must fit all of these requirements:

• Be under age 17 at the end of the tax year
• Is your son, daughter, stepchild, foster child, adopted child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of any of them (for example, a grandchild, niece, or nephew)
• Has his or her own Social Security Number
• Lived with you for more than half the year
• Didn't support him/herself (i.e., didn't pay more than half their own expenses)
• Is a U.S. citizen, U.S. national, or U.S. resident alien

Additionally, you must have tax liability for the credit to be applied to.  If you do not, you may qualify for the Additional Child Tax Credit.

 

These links will provide more information:

Child Tax Credit

Additional Child Tax Credit