What is the Income Limit for the 2021 Child Tax Credit?

A portrait of happy young family with two small children sitting on a ground in autumn nature at sunset, having picnic.
Halfpoint / Getty Images/iStockphoto

The American Rescue Plan raised the 2021 Child Tax Credit from $2,000 per child to $3,000 per child for children over the age of 6, and from $2,000 to $3,600 for children under the age of 6. It also raised the age limit from 16 to 17. But not every household qualifies for the full credit.

See: Parents Take to Twitter (Again) About Shortages in October’s Child Tax Credit PaymentFind: How To Change Your Direct Deposit Information on the Child Tax Credit Update Portal

Working families will get the full credit if they make $150,000 a year or less for married couples or $112,500 or less for a family with a single parent, also called Head of Household, according to the White House website. But the benefit begins to phase out for families that earn more than that.

According to the Tax Policy Center, the CTC starts to decrease at $112,500 for single parents and $150,000 for married couples, declining in value at a rate of 5% of any adjusted gross income over the limit until it reaches pre-2021 levels. The credit’s value is further reduced by 5% of adjusted gross income over $200,000 a year for single parents and $400,000 a year for married couples.

Low-income families qualify for the maximum credit regardless of how much they earn, the Tax Policy Center noted.

See: Stimulus Update: 1 in 10 Eligible Families Did Not Receive Child Tax Credit PaymentsFind: Stimulus Qualification: Here’s How to Get the Child Tax Credit if You Had a Child in 2021

If you are not automatically receiving monthly CTC payments, the deadline to sign up is Nov. 15.

Get Tax Debt Help

More From GOBankingRates


See Today's Best
Banking Offers