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Refundable Child Tax Credit

A tax credit that not only reduces the amount of tax you owe but can also provide a refund if the credit amount is larger than your tax liability, meaning you get money back even if you don't owe any taxes.

Monthly Advance Payment

Instead of receiving a tax credit as a lump sum after filing annual taxes, eligible families would get portions of the credit paid out each month throughout the year.

Modified Adjusted Gross Income (MAGI)

A taxpayer's gross income (wages, salary, interest, etc.) adjusted for certain deductions, plus any foreign earned income, housing expenses, or income from U.S. territories that were excluded from regular gross income. This figure is used to determine eligibility for certain tax benefits.

Specified Child

An individual who lives with the taxpayer for more than half the month, is younger than the taxpayer, is under age 18, receives uncompensated care from the taxpayer, is not the taxpayer's spouse, and meets specific citizenship or residency requirements.

Initial Threshold Amount

The income level ($150,000 for joint filers; $112,500 for others) above which the monthly child tax credit payments begin to be reduced for a taxpayer.

Secondary Threshold Amount

A higher income level ($400,000 for joint filers; $300,000 for others) after which the monthly child tax credit is further reduced or phased out entirely, depending on the number of children.