Thank you very much for your quick reply (I had not realized how helpful this forum community was until I asked 2 questions today - I've used TT for many years but rarely thought to ask questions here since I always do my taxes with little time to spare and assumed answer turn around would be poor 😉 )
IF I understand, that means (again for M-F-J), if you earn between $150,000 and 170,000 you will get some amount smaller than $3,000 (basically 3,000 - ((AGI-150,000)/1000*50)). Once you hit $170,000 you only qualify for 2K in credit and this amount remains until you hit $400,001 - whereupon that same formula above kicks in except you substiture 400,000 for the 150,000 in the above calc..)
So for me, earning $395,000 (most in shares which were treated as income) means I get a 2,000 credit for my son still, same as last year. Only, this year we were given $184 in advance payments before I had the chance to opt-out.
I googled a little since I am more "awake" now. I saw this page which looks like a very detailed FAQ. Yet, I am a little confused. Your reply, for example "to get max credit" is spot on where (in my case as Married Filing Jointly) I do not qualify for the maximum (the new 3K) since I earn more than $150K. However, over 150K - I thought my new max is now 2K.
BUT -> I am wrong 😉
TurboTax shows in the "Adv payments...Tax Credits" section for CTC as $2,000 in 2020 and $782.
I assume that was then a total of (782+168(advCTC)= qualify for $950 in 2021?
If so, that's a 1,050 drop from 2,000. so 1050/50=21. From that, I would infer I went over by about 21,000 over some limit. But I don't get that. None of my numbers seem to work with that.
OOOO... I see now as I revisit "Federal Review", I was looking at my "Your TAXABLE Income" which was $395,000 but my "Your Total Income" was $420,600 (vs $229,800 in 2020) --> THAT would likely be the 20K over the max 400K to reduce below 2,000 credit.
I included all that even after I satisfied myself enough to understand why I didn't get the credit (normally all these shares would be spread over 5 years... giving me an income of ~$230 normally - new place doesn't give those - if not for slightly better bonus and work from home - I'd be earning less) - but maybe the example might help someone figure out the wording below as it applioes to themselves by looking at it.
Thanks so much again!
Dan
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These updated FAQs were released to the public in Fact Sheet 2022-17 PDF , March 8, 2022.
Use tab to go to the next focusable element
A1. For tax year 2021, the Child Tax Credit increased from $2,000 per qualifying child to:
- $3,600 for children ages 5 and under at the end of 2021; and
- $3,000 for children ages 6 through 17 at the end of 2021.
Note: The $500 nonrefundable Credit for Other Dependents amount has not changed. For more information about the Credit for Other Dependents, see IRS Schedule 8812 (Form 1040), Credits for Qualifying Children and Other Dependents.
A2. Yes. The Child Tax Credit phases out in two different steps based on your modified adjusted gross income (AGI) in 2021.
The first phaseout can reduce the Child Tax Credit to $2,000 per child.
- That is, the first phaseout step can reduce only the $1,600 increase for qualifying children ages 5 and under, and the $1,000 increase for qualifying children ages 6 through 17, at the end of 2021.
The second phaseout can reduce the remaining Child Tax Credit below $2,000 per child.
For additional information on the amounts of modified AGI that reduce the 2021 Child Tax Credit, see Q C4 and Q C5, below.
A3. For purposes of the Child Tax Credit and advance Child Tax Credit payments, your modified AGI is your adjusted gross income (from the 2020 IRS Form 1040, line 11, or, if you haven’t filed a 2020 return, the 2019 IRS Form 1040, line 8b), plus the following amounts that may apply to you.
- Any amount on line 45 or line 50 of the 2020 or 2019 IRS Form 2555, Foreign Earned Income.
- Any amount excluded from gross income because it was received from sources in Puerto Rico or American Samoa.
If you do not have any of the above, your modified AGI is the same as your AGI.
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.
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.
