There are two different phaseouts for the Child Tax Credit for Tax Year 2021 partly to account for the increased per-child amount.
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According to the IRS:
"How does the first phaseout reduce the 2021 Child Tax Credit to $2,000 per child? (added June 14, 20...
A4. The Child Tax Credit begins to be reduced to $2,000 per child if your 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 reduces the Child Tax Credit by $50 for each $1,000 (or fraction thereof) by which your modified AGI exceeds the income threshold described above that is applicable to you.
How does the second phaseout reduce the remaining $2,000 Child Tax Credit? (added June 14, 2021)
A5. 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 your modified AGI exceeds the income threshold described above that is applicable to you."
IRS LINK
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