Yes, your Modified Adjusted Gross Income (MAGI) can significantly affect your eligibility for the Child Tax Credit (CTC). Here’s how it works:
- Income Limits: To qualify for the full CTC, your MAGI must not exceed $400,000 if you are married filing jointly or $200,000 for all other filers.
- Phase-Out: If your MAGI exceeds these thresholds, the credit is reduced by $50 for every $1,000 of income above the limit until it phases out completely.
- Calculation of MAGI: MAGI is calculated by starting with your Adjusted Gross Income (AGI) and then adding back certain deductions or exclusions. This adjusted figure is crucial in determining whether you can claim the full credit, a reduced credit, or no credit at all.
By managing your MAGI, you can optimize your eligibility for tax credits like the Child Tax Credit.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/can-magi-affect-my-eligibility-for-the-child-tax-credit/
