Tax credits are generally based on Adjusted Gross Income (AGI) or Modified Adjusted Gross Income (MAGI), not total gross income or net (after-tax) income. AGI is the starting point for determining eligibility for most credits, such as the Earned Income Tax Credit (EITC).
What income is counted in determining my eligibility for premium tax credits? Eligibility for premium tax credits is based on your Modified Adjusted Gross Income, or MAGI.
You should enter the amount you receive before Income tax and National Insurance contributions are deducted. Your gross annual earnings should be shown on your P60 . If you have two or more jobs please enter your earnings from all employment.
The amount of California Earned Income Tax Credit (CalEITC) you may receive depends on your income and family size. CalEITC may provide you with cash back or reduce any tax you owe.
You might be disqualified from the Child Tax Credit (CTC) if your child is too old (17+), doesn't meet relationship/residency/citizenship tests, you claim them as a dependent but can't, or your income is too high (phasing out) or too low (limiting the refundable part), or if the non-custodial parent claims them. Other disqualifiers include the child having an ITIN instead of a Social Security Number (SSN) or filing a joint tax return.
For the federal Child Tax Credit (CTC), the full amount starts phasing out when Modified Adjusted Gross Income (MAGI) exceeds $200,000 for single filers and $400,000 for married couples filing jointly, with the credit reduced by $50 for every $1,000 over these thresholds, though some states offer separate CTCs with different income limits. To claim the federal CTC, you generally need a qualifying child with a Social Security Number and must meet other dependency rules, and you may get a partial credit even with higher income.
The credit is calculated based on the amount you earned above $2500 multiplied by 15%, up to the full $1700 per child. If the amount you earned was too low, you will not get the full $1700. If your child is older than 16 at the end of 2024, you do not get the CTC.
The 2025 Child Tax Credit (CTC) offers up to $2,200 per qualifying child under age 17. The Child Tax Credit begins to decrease if your income exceeds $200,000 (or $400,000 for joint filers).
In addition to the earned income requirement, you must have an adjusted gross income (AGI) below certain levels to qualify for an EITC. Your adjusted gross income (AGI) includes all earned income before deductions for taxes, health care or other expenses, minus certain business, education-related, and other expenses.
Tax credit income limits vary significantly by credit (like EITC, Child Tax Credit, AOTC) and depend on filing status and family size, generally using Modified Adjusted Gross Income (MAGI) thresholds, with common examples for 2025 showing phase-outs starting around $200k for Child Tax Credit and specific MAGI caps for AOTC (e.g., $80k single/$160k joint) and EITC ($68.6k single/$61.5k MFJ for 2025). Higher income typically reduces or eliminates credits, while lower incomes may qualify for programs like the EITC or Housing Credits.
Generally, you must include in gross income everything you receive in payment for personal services. In addition to wages, salaries, commissions, fees, and tips, this includes other forms of compensation such as fringe benefits and stock options.
“What is AGI?” and “What is AGI on taxes?” AGI is simply the acronym for Adjusted Gross Income. It's a common term used for tax purposes, so it's important to understand AGI's meaning and relevance. To boil it down, it's simply your total gross income minus specific tax deductions.
Some credit card issuers will ask specifically for your net income, which is the amount of money you bring home in your paycheck after taxes, health insurance premiums and retirement contributions are taken out. Others may explicitly ask for your gross income.
Here are credits you can claim:
Premium tax credits are available to people who buy Marketplace coverage and whose income is at least as high as the federal poverty level. For an individual, that means an income of at least $15,650 in 2026.
Your child tax credit is likely $500 instead of $2,000 because they either turned 17 during the tax year, making them eligible for the Other Dependent Credit, or you might have mistakenly checked a box in your tax software, like saying their SSN isn't valid for employment or that they paid over half their own support, which triggers the lower credit amount, according to TurboTax support, TurboTax support, TurboTax support, and TurboTax support https://ttlc.intuit.index.php/community/taxes/discussion/my-daughter-is-17-but-is-still-jr-in-high-school-why-do-i-only-get-500-for-her-and-not-the-full-2000/00/3423950.
Calculate your Child Tax Credit
As we mentioned above, the CTC starts phasing out at $200,000 for single filers and $400,000 for married couples filing jointly. For every $1,000 you make above these limits, your CTC will be $50 less.
You qualify for the full amount of the Child Tax Credit for each qualifying child if you meet all eligibility factors and your annual income is not more than $200,000 ($400,000 if filing a joint return). Parents and guardians with higher incomes may be eligible to claim a partial credit.
You might not get the full Child Tax Credit (CTC) due to income limits, your child's age, insufficient earned income, claiming errors (like wrong dependent info or another parent claiming the child), or because the temporary 2021 expansion rules aren't in effect, limiting the credit to your tax liability (part refundable as Additional Child Tax Credit (ACTC)), requiring at least $2,500 earned income for ACTC.
The credit is reduced by 5 percent of adjusted gross income over $200,000 for single parents ($400,000 for married couples).
Your income doesn't directly impact your credit score, though how much money you make affects your ability to pay off your loans and debts, which in turn affects your credit score. "Creditworthiness" is often shown through a credit score.
You are not eligible if any of these apply: You were a full-year nonresident. You have an IRS ban on claiming the federal Earned Income Tax Credit (EITC) You are another person's dependent or qualifying child.