The Child Tax Credit phases out in two steps based on the taxpayer's adjusted gross income (AGI) in 2021.
Phaseout Step 1: The Child Tax Credit begins to be reduced to $2,000 per child when a taxpayer's modified AGI in 2021 exceeds:
- $150,000 if married and filing a joint return or if filing as a qualifying widow or widower;
- $112,500 if filing as head of household; or
- $75,000 if you are a single filer or are married and filing a separate return.
The first phaseout step reduces the Child Tax Credit to $2,000 per child (instead of the full amount). The credit is reduced by $50 for each $1,000 (or fraction thereof) by which a taxpayer's modified AGI exceeds the income threshold described above.
Phaseout Step 2: The Child Tax Credit won’t begin to be reduced below $2,000 per child until your modified AGI in 2021 exceeds:
- $400,000 if married and filing a joint return; or
- $200,000 for all other filing statuses.
The second phaseout reduces the Child Tax Credit by $50 for each $1,000 (or fraction thereof) by which a taxpayer's modified AGI exceeds the income threshold described above that is applicable.
Additional Information: