Dependent Credit

[Raddad44]

I have two kids at home, 16 and 18 years old.  My dependent credit is showing $1350.  My letter 6419 (correctly) identifies our advance child tax credit as $1350.  My understanding is that the 16 year old should earn a $3000 credit, and the older child $500.  The $500 for the 18 year old shows up correctly in the forms, but the younger child is only showing $2200. Why would the remaining credit not be $2150 (3000+500-1350) instead of what shows (2200+500-1350=1350)?

[xmasbaby0 · Accepted solution]

Is your income high enough to be in the "phaseout" range?

Q C2. Can my Child Tax Credit amount be reduced based on the amount of my 2021 income? (added June 1...

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.

Q C4. How does the first phaseout reduce the 2021 Child Tax Credit to $2,000 per child? (added June ...

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.