What is the Child Tax Credit?

The CTC is a tax credit for parents of dependent children designed to help offset the cost of raising kids.

For tax year 2021, the CTC is fully refundable, meaning you can claim this tax credit even if you do not owe any taxes or didn’t earn any income last year. On your 2021 return, you can claim the CTC for any children ages 17 or under (in prior years, you could only claim the credit for children under 17).

How much is the Child Tax Credit for tax year 2021?

For the 2021 tax season, the maximum total credit amount increased from the usual $2,000 per child to $3,000 per child ages 6-17 (and up to $3,600 for children ages 5 and under).

Depending on your tax filing status, the increased credit of $1,000 or $1,600 begins to phase out based on your AGI.

You qualify to claim the maximum value of the Child Tax Credit if your AGI is:

$75,000 or less for single filers
$150,000 or less for married couples filing jointly
$112,500 or less for head-of-household filers
If your AGI is higher than those limits, you could still receive a portion of the increased tax credit. In that event, the increased portion of the credit (either $1,000 or $1,600 per child) is reduced by $50 for every extra $1,000 you earn above the income thresholds. For example, if you file a joint 2021 return, have an AGI of $160,000 and two children 5 and under, your full Child Tax Credit amount will likely be $6,700.

The original $2,000 credit per eligible child doesn’t begin to phase out until your AGI exceeds $200,000 (or $400,000 for joint filers).