For the 2021 tax year, you can take full advantage of the expanded credit if your modified adjusted gross income is under $75,000 for single filers, $112,500 for heads of household, and $150,000 for those married filing jointly.
The credit begins to phase out above those thresholds.
First phaseout: Income exceeds the above thresholds but is below $400,000 (married filing jointly) or $200,000 (all other filing statuses). Your total credit per child can be reduced by $50 for each $1,000 (or a fraction thereof). This phaseout will not reduce your credit below $2,000 per child.
Second phaseout: Income exceeds $400,000 (married filing jointly) or $200,000 (other filing statuses). The phaseout will continue docking $50 per each $1,000 and begin to reduce your credit per child below $2,000. You may be disqualified from the credit altogether.
Some of the other eligibility requirements for the child tax credit include:
- You must have provided at least half of the child’s support during the last year, and the child must have lived with you for at least half the year (there are some exceptions to this rule; the IRS has the details here).
- The child cannot file a joint tax return.
- You must have lived in the U.S. for more than half the year (or, if filing jointly, one spouse must have had a main home in the U.S. for more than half the year).