Your repayment protection amount will decrease based on how much your modified adjusted gross income (AGI) is greater than $60,000 if you are married and filing a joint return, and then are gradually phased out until completely phased out at $120,000. Your repayment protection will depend on your adjusted gross income and where is falls between $60,000 and $120,000.
Example: You filed a joint return with your spouse for tax year 2020 and properly claimed the Child Tax Credit for three qualifying children. The IRS estimated your total advance Child Tax Credit payment amount based on these qualifying children. However, when you file your 2021 joint tax return with a modified AGI of $75,000, you claim the Child Tax Credit for only one qualifying child – and therefore have two excess qualifying children. Your modified AGI of $75,000 exceeds your applicable $60,000 modified AGI threshold by 25 percent. Your potential full repayment protection amount of $4,000 (that is, $2,000 for each excess qualifying child) is reduced by 25 percent to $3,000.
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