Benefits to Families and Individuals from the

Major Family and Education Tax Provisions

under the Administration’s Budget Proposals for Fiscal Year 20221

in Taxable Year 2022

Office of Tax Analysis

August 18, 2021

Deena Ackerman

Michael Cooper

1 A companion document describing the benefits to families for taxable year 2022 under current law instead of under 

the Administration’s Budget Proposals for Fiscal Year 2022 is also available on the Treasury website.
The federal income tax system supports families by reducing their tax liabilities, and thus 

increasing their after-tax incomes, in several different ways. Principally, this support takes the 

form of certain deductions and credits available only to taxpayers with children or other 

dependents. This document presents a series of tables that describe the income tax benefits to 

families and individuals from key provisions as proposed for taxable year 2022 as a function of 

adjusted gross income (AGI). A substantial expansion for taxable year 2021 of some of the 

provisions was enacted as part of the American Rescue Plan Act of 2021 (Public Law 117-2). 

The Fiscal Year 2022 Budget proposes that these expansions be extended additional years.2

The provisions examined are head of household filing status (HoH); the earned income tax credit 

(EITC); the child tax credit, the additional child tax credit, and the other dependent tax credit 

(CTC, ACTC and ODTC respectively); the child and dependent care tax credit (CDCTC); the 

American opportunity tax credit (AOTC); and the lifetime learning tax credit (LLTC). The EITC 

and the education credits are available to families and individuals. The tables show the number 

of tax units3 expected to benefit from or claim these benefits using Treasury’s Individual Tax 

Model (ITM). The ITM takes a stratified random sample of tax returns from a base year, 

forecasts the values of line items on the tax returns for 2022, and applies a very detailed tax 

calculator to analyze how changes in the tax system affect tax liability. 

Summary Table A answers the questions for the key family and education tax benefits under the 

Administration’s Budget: “How many tax units benefit from the provision(s), what is the total 

amount of benefit and what is the average benefit per return?” The benefits are explored 

individually and in combination. Summary Table B answers the questions for the key family and 

education tax benefits under the Administration’s Budget: “How many tax units claim the 

provision(s) and what is the total amount claimed and average amount claimed per return?” 

For any given provision shown in Summary Table A, the amount of benefit is calculated by 

comparing estimated tax liability to what estimated tax liability would be in the absence of the 

provision (but with the law and proposed law otherwise unchanged). In some cases, the number 

of tax units benefiting (or the amount of benefit received) is smaller than the number of tax units 

claiming (or the amount claimed). This difference occurs in cases where some would have 

chosen an alternate credit if the one under consideration were repealed. For example, in absence 

of the CTC, nearly all current claimants would switch to the ODTC. At most, these taxpayers 

would see their taxes increase by $3,100 and not the full $3,600 per young child. The number of 

credits claimed and the amount claimed are shown in Summary Table B. The amounts in 

Summary Table B also differ from the amounts shown in Summary Table A because the 

estimates in Summary Table A ignore changes in tax of less than $5.

The remaining tables present greater detail for each of the lines of Summary Table A. An 

appendix provides a brief summary of the provisions, as proposed in the Budget. 

2 Readers are referred to the General Explanation of the Administration’s Budget Proposals for FY 2022 

(Greenbook) for complete descriptions of current law reflecting the passage of the American Rescue Plan for taxable 

year 2021 and of the proposals: https://home.treasury.gov/system/files/131/General-Explanations-FY2022.pdf. 3 A tax unit consists of the individuals on a given tax return. In some cases, membership will be identical to the 

household or family, but in other cases (e.g. a multigenerational household) membership will differ.
Administration’s Budget for FY2022

2

Summary Table A

Tax Support for Families from Main Family-Related Tax Provisions 

under Administration’s Budget

Taxable Year 2022

Counts and Amounts of Tax Units Benefitting from ...1

Total Total Average

Tax Units2 Value Benefit

(millions) ($billions) ($)

1 Head of Household Filing Status 19.2 22.0 1,143

2

Child Credit (CTC) and Additional Child Tax Credit 

(ACTC) 50.3 221.7 4,409

and Other Dependent Credit (ODC)

2A Child Tax Credit and Additional Child Tax Credit 41.5 188.3 4,535

2B Additional Child Tax Credit (ACTC) 25.9 111.0 4,280

(make ACTC nonrefundable)

2C Other Dependent Credit 14.4 9.2 637

3 Earned Income Tax Credit (EITC) 35.3 78.8 2,233

3A EITC Marriage Penalty Relief3 4.0 3.6 896

3B EITC Students and Disabled 3.1 5.9 1,889

(repeal EITC for qualifying children >18)

3C EITC for Families with Children 19.4 64.9 3,352

3D EITC for Families with No Children 16.0 14.0 875

4 Child and Dependent Care Tax Credit 7.2 14.5 2,012

5 Education Credits (AOTC and LLTC) 13.1 18.0 1,375

5A Lifetime Learning Credit (LLTC) 12.9 17.6 1,363

5B American Opportunity Tax Credit (AOTC) 8.9 9.4 1,053

5C Refundability of AOTC4 4.7 4.0 836

(make AOTC nonrefundable)

6 Any Major Family and Education Credit5 71.8 333.1 4,638

Office of Tax Analysis July 12, 2021
Administration’s Budget for FY2022

3

1 The tax benefits included in this table are the head of household filing status, the earned income tax credit 

(EITC), the child tax credit (CTC), the additional child tax credit (ACTC), the child and dependent care tax credit 

(CDCTC), the American opportunity tax credit (AOTC), the lifetime learning tax credit (LLTC) and the other 

dependent tax credit (ODTC).

2 Dependent returns are excluded from the calculations. Returns are considered to benefit from a provision (or set 

of provisions) if income tax liability increases by $5 or more if the provision is (or provisions are) repealed.

3 In 2022, the phaseout range of the EITC for joint filers begins at incomes $6,050 higher than for other filers.

4 Even though all 8.9 million tax units claiming an AOTC claim the 40 percent of the credit that is refundable, only 

those with insufficient tax liability to offset their full credit benefit from this refundability. Tax units with sufficient tax 

liability would receive their full credit even without refundability; they are therefore not included among the 4.7 

million units benefiting from refundability.

5. The credits included in line 6 are the seven credits described in footnote 1.
Administration’s Budget for FY2022

4

Summary Table B

Number of Tax Units Claiming and Amounts Claimed for Key Family Credits1

Under Administration’s Budget 

Taxable Year 2022

Tax Credit 

Number of 

Tax Units

Amount 

Claimed

Average 

Claimed

(numbers correspond to Tables 2-6) (Millions) ($Billions) ($)

2. Total CTC, ACTC and ODTC 50.5 221.9 4,396

2A. Total CTC + ACTC 41.5 212.6 5,120

- CTC 31.4 102.0 3,246

2B. ACTC 25.9 110.6 4,264

2C. ODTC 14.7 9.4 637

3. Total EITC 35.4 78.8 2,229

3C. EITC for workers with children 19.4 64.9 3,350

3D. EITC for workers without children 16.0 14.0 872

4. Total CDCTC 7.2 14.5 2,010

5. Total Education Credits 13.2 18.1 1,370

5A. LLTC2 4.5 3.3 735

5B. Total AOTC 9.0 14.8 1,647

- AOTC nonrefundable portion 6.6 7.1 1,083

5C. AOTC refundable portion3 9.0 7.6 851

6. Total EITC, CTC, ACTC & ODTC, CDCTC, & Educ. 71.9 333.4 4,634

Credits

Office of Tax Analysis July 12, 2021

1 The tax benefits included in this table are the earned income tax credit (EITC), the child tax credit (CTC), the additional 

child tax credit (ACTC), the other dependent tax credit (ODTC), the child and dependent care tax credit (CDCTC), the 

American opportunity tax credit (ACTC) and the lifetime learning tax credit (LLTC). Head of Household filing status is not 

included. The line numbers correspond as closely as possible to Tables 2-6. Lines that are not numbered (but begin with 

a dash) do not correspond to an earlier table. 2 The Omnibus Appropriations and Covid-19 Relief Act passed in December of 2020 expanded the phaseout of the LLTC 

to the higher AOTC levels.

3 As written in the statute, the AOTC is calculated in two pieces: 40 percent of the otherwise allowable AOTC is 

refundable and the remaining 60 percent is not refundable. Thus, all tax units claiming an AOTC receive the refundable 

portion of the AOTC but only those with tax liability to offset are able to claim all or part of the nonrefundable portion of 

the AOTC. Of the 9 million tax units claiming an AOTC, 4.7 million would receive a smaller credit, or none at all, if the 

AOTC were not refundable.
Administration’s Budget for FY2022

5

Table 1

Estimated Benefit from

Head of Household Filing Status

Taxable Year 2022 – Administration’s Budget

Adjusted Tax Units Total Average

Gross Income Benefiting Benefit Benefit

($) (Thousands) ($Millions) ($)

0 - 15,000 650 71 110

15,001 - 30,000 5,648 3,047 540

30,001 - 40,000 3,494 2,818 807

40,001 - 50,000 2,535 2,140 844

50,001 - 60,000 1,879 1,741 926

60,001 - 75,000 1,813 3,412 1,882

75,001 - 100,000 1,551 4,442 2,864

100,001 - 200,000 1,369 3,630 2,651

200,001 - 500,000 229 485 2,120

500,001 - 1,000,000 43 136 3,184

1,000,001 - 5,000,000 15 49 3,319

over 5,000,000 2 5 3,126

Total1 19,227 21,977 1,143

Office of Tax Analysis June 25, 2021

1 Returns with negative income are excluded from the lowest income class but included in the 

total line. Dependent returns are excluded from the calculations. Returns with a tax change of at 

least $5 are included in the calculations. 
Administration’s Budget for FY2022

6

Table 2

Estimated Benefit from

Child Tax Credit (CTC), Additional Child Tax Credit (ACTC) 

and Other Dependent Tax Credit (ODTC)

Taxable Year 2022 – Administration’s Budget

Adjusted Tax Units Total Average

Gross Income Benefiting Benefit Benefit

($) (Thousands) ($Millions) ($)

0 - 15,000 5,769 26,701 4,628

15,001 - 30,000 8,888 42,020 4,728

30,001 - 40,000 5,272 23,054 4,373

40,001 - 50,000 4,127 18,426 4,465

50,001 - 60,000 3,475 15,674 4,510

60,001 - 75,000 4,082 18,159 4,448

75,001 - 100,000 5,076 23,285 4,587

100,001 - 200,000 9,671 42,275 4,372

200,001 - 500,000 3,728 11,125 2,984

500,001 - 1,000,000 14 20 1,353

1,000,001 - 5,000,000 0 0 0

over 5,000,000 0 0 0

Total1 50,284 221,681 4,409

Office of Tax Analysis June 25, 2021

1 Returns with negative income are excluded from the lowest income class but included in the 

total line. Dependent returns are excluded from the calculations. Returns with a tax change of at 

least $5 are included in the calculations. 
Administration’s Budget for FY2022

7

Table 2A

Estimated Benefit from

Child Tax Credit (CTC) and Additional Child Tax Credit (ACTC)

Taxable Year 2022 – Administration’s Budget

Adjusted Tax Units Total Average

Gross Income Benefiting Benefit Benefit

($) (Thousands) ($Millions) ($)

0 - 15,000 5,740 26,675 4,647

15,001 - 30,000 7,819 39,697 5,077

30,001 - 40,000 4,180 19,203 4,594

40,001 - 50,000 3,217 14,862 4,620

50,001 - 60,000 2,721 12,506 4,597

60,001 - 75,000 3,143 14,518 4,619

75,001 - 100,000 3,944 18,623 4,722

100,001 - 200,000 7,595 33,335 4,389

200,001 - 500,000 2,960 7,880 2,662

500,001 - 1,000,000 14 20 1,353

1,000,001 - 5,000,000 0 0 0

over 5,000,000 0 0 0

Total1 41,515 188,261 4,535

Office of Tax Analysis July 2, 2021

1 Returns with negative income are excluded from the lowest income class but included in the 

total line. Dependent returns are excluded from the calculations. Returns with a tax change of at 

least $5 are included in the calculations. 
Administration’s Budget for FY2022

8

Table 2B

Estimated Benefit from

Refundability of Additional Child Tax Credit (ACTC)

Taxable Year 2022 – Administration’s Budget

Adjusted Tax Units Total Average

Gross Income Benefiting Benefit Benefit

($) (Thousands) ($Millions) ($)

0 - 15,000 5,740 26,673 4,647

15,001 - 30,000 7,819 39,294 5,026

30,001 - 40,000 4,173 16,824 4,032

40,001 - 50,000 2,971 10,450 3,517

50,001 - 60,000 1,791 6,630 3,703

60,001 - 75,000 1,581 5,396 3,412

75,001 - 100,000 1,243 3,463 2,787

100,001 - 200,000 425 1,295 3,043

200,001 - 500,000 3 13 3,806

500,001 - 1,000,000 0 0 1,340

1,000,001 - 5,000,000 0 0 0

over 5,000,000 0 0 0

Total1 25,927 110,977 4,280

Office of Tax Analysis June 30, 2021

1 Returns with negative income are excluded from the lowest income class but included in the 

total line. Dependent returns are excluded from the calculations. Returns with a tax change of at 

least $5 are included in the calculations. 
Administration’s Budget for FY2022

9

Table 2C

Estimated Benefit from

Other Dependent Tax Credit (ODTC)

Taxable Year 2022 – Administration’s Budget

Adjusted Tax Units Total Average

Gross Income Benefiting Benefit Benefit

($) (Thousands) ($Millions) ($)

0 - 15,000 45 6 126

15,001 - 30,000 1,667 735 441

30,001 - 40,000 1,784 1,185 665

40,001 - 50,000 1,476 1,025 695

50,001 - 60,000 1,268 921 726

60,001 - 75,000 1,520 1,007 662

75,001 - 100,000 1,837 1,232 671

100,001 - 200,000 3,477 2,200 633

200,001 - 500,000 1,313 859 654

500,001 - 1,000,000 1 1 532

1,000,001 - 5,000,000 0 0 0

over 5,000,000 0 0 0

Total1 14,388 9,171 637

Office of Tax Analysis June 30, 2021

1 Returns with negative income are excluded from the lowest income class but included in the 

total line. Dependent returns are excluded from the calculations. Returns with a tax change of at 

least $5 are included in the calculations. 
Administration’s Budget for FY2022

10

Table 3

Estimated Benefit from

Earned Income Tax Credit (EITC)

Taxable Year 2022 – Administration’s Budget

Adjusted Tax Units Total Average

Gross Income Benefiting Benefit Benefit

($) (Thousands) ($Millions) ($)

0 - 15,000 15,645 28,066 1,794

15,001 - 30,000 12,928 37,926 2,934

30,001 - 40,000 4,015 9,675 2,410

40,001 - 50,000 2,053 2,593 1,263

50,001 - 60,000 412 272 660

60,001 - 75,000 0 0 0

75,001 - 100,000 0 0 0

100,001 - 200,000 0 0 0

200,001 - 500,000 0 0 0

500,001 - 1,000,000 0 0 0

1,000,001 - 5,000,000 0 0 0

over 5,000,000 0 0 0

Total1 35,313 78,841 2,233

Office of Tax Analysis July 8, 2021

1 Returns with negative income are excluded from the lowest income class but included in the 

total line. Dependent returns are excluded from the calculations. Returns with a tax change of at 

least $5 are included in the calculations.
Administration’s Budget for FY2022

11

Table 3A

Estimated Benefit from

Earned Income Tax Credit (EITC)

Marriage Penalty Relief1

Taxable Year 2022 – Administration’s Budget

Adjusted Tax Units Total Average

Gross Income Benefiting Benefit Benefit

($) (Thousands) ($Millions) ($)

0 - 15,000 166 66 395

15,001 - 30,000 1,501 1,149 766

30,001 - 40,000 990 1,141 1,153

40,001 - 50,000 970 990 1,021

50,001 - 60,000 376 247 658

60,001 - 75,000 0 0 0

75,001 - 100,000 0 0 0

100,001 - 200,000 0 0 0

200,001 - 500,000 0 0 0

500,001 - 1,000,000 0 0 0

1,000,001 - 5,000,000 0 0 0

over 5,000,000 0 0 0

Total2 4,039 3,620 896

Office of Tax Analysis July 9, 2021

1 In 2022, the phaseout range of the EITC for joint filers begins at incomes $6,050 higher than 

for other filers. 2 Returns with negative income are excluded from the lowest income class but included in the 

total line. Dependent returns are excluded from the calculations. Returns with a tax change of at 

least $5 are included in the calculations.
Administration’s Budget for FY2022

12

Table 3B

Estimated Benefit from

EITC for Students and Disabled Adults

(EITC Qualifying Children Aged 19 to 23 and the Disabled Aged 19 and Up)1

Taxable Year 2022 – Administration’s Budget

Adjusted Tax Units Total Average

Gross Income Benefiting2 Benefit Benefit

($) (Thousands) ($Millions) ($)

0 - 15,000 660 1,122 1,700

15,001 - 30,000 1,239 3,214 2,594

30,001 - 40,000 735 1,144 1,555

40,001 - 50,000 386 309 802

50,001 - 60,000 60 33 542

60,001 - 75,000 0 0 0

75,001 - 100,000 0 0 0

100,001 - 200,000 0 0 0

200,001 - 500,000 0 0 0

500,001 - 1,000,000 0 0 0

1,000,001 - 5,000,000 0 0 0

over 5,000,000 0 0 0

Total2 3,099 5,856 1,889

Office of Tax Analysis July 9, 2021

1 In general, a qualifying child must be under 19 years of age. Exceptions are in place for fulltime students and the disabled. The age limit is extended to under 24 for full-time students. A 

full-time student is an individual who during each of five calendar months during the year was a 

full-time student at an educational organization broadly defined, or certain farm-related 

programs. The category “educational organizations” includes many types of schooling beyond 

traditional college. Full-time is defined by the educational organization. (In general, it 

corresponds to at least twelve credits hours or the equivalent.) Children who are permanently 

and totally disabled face no age limitation for the EITC. 

2 Returns with negative income are excluded from the lowest income class but included in the 

total line. Dependent returns are excluded from the calculations. Returns with a tax change of at 

least $5 are included in the calculations.
Administration’s Budget for FY2022

13

Table 3C

Estimated Benefit from

Earned Income Tax Credit (EITC) – Tax Units with Children

Taxable Year 2022 – Administration’s Budget

Adjusted Tax Units Total Average

Gross Income Benefiting Benefit Benefit

($) (Thousands) ($Millions) ($)

0 - 15,000 4,991 17,006 3,407

15,001 - 30,000 7,823 35,150 4,493

30,001 - 40,000 4,015 9,675 2,410

40,001 - 50,000 2,053 2,593 1,263

50,001 - 60,000 412 272 660

60,001 - 75,000 0 0 0

75,001 - 100,000 0 0 0

100,001 - 200,000 0 0 0

200,001 - 500,000 0 0 0

500,001 - 1,000,000 0 0 0

1,000,001 - 5,000,000 0 0 0

over 5,000,000 0 0 0

Total1 19,355 64,877 3,352

Office of Tax Analysis July 9, 2021

1 Returns with negative income are excluded from the lowest income class but included in the 

total line. Dependent returns are excluded from the calculations. Returns with a tax change of at 

least $5 are included in the calculations. 
Administration’s Budget for FY2022

14

Table 3D

Estimated Benefit from

Earned Income Tax Credit (EITC) – Tax Units with No Children

Taxable Year 2022 – Administration’s Budget

Adjusted Tax Units Total Average

Gross Income Benefiting Benefit Benefit

($) (Thousands) ($Millions) ($)

0 - 15,000 10,655 11,060 1,038

15,001 - 30,000 5,105 2,777 544

30,001 - 40,000 0 0 0

40,001 - 50,000 0 0 0

50,001 - 60,000 0 0 0

60,001 - 75,000 0 0 0

75,001 - 100,000 0 0 0

100,001 - 200,000 0 0 0

200,001 - 500,000 0 0 0

500,001 - 1,000,000 0 0 0

1,000,001 - 5,000,000 0 0 0

over 5,000,000 0 0 0

Total1 15,958 13,964 875

Office of Tax Analysis July 9, 2021

1 Returns with negative income are excluded from the lowest income class but included in the 

total line. Dependent returns are excluded from the calculations. Returns with a tax change of at 

least $5 are included in the calculations. 
Administration’s Budget for FY2022

15

Table 4

Estimated Benefit from

Child and Dependent Care Tax Credit (CDCTC)

Taxable Year 2022 – Administration’s Budget

Adjusted Tax Units Total Average

Gross Income Benefiting Benefit Benefit

($) (Thousands) ($Millions) ($)

0 - 15,000 342 496 1,453

15,001 - 30,000 713 1,532 2,150

30,001 - 40,000 609 1,235 2,028

40,001 - 50,000 551 1,151 2,089

50,001 - 60,000 486 1,077 2,216

60,001 - 75,000 551 1,352 2,454

75,001 - 100,000 806 1,947 2,416

100,001 - 200,000 2,194 4,564 2,080

200,001 - 500,000 959 1,152 1,202

500,001 - 1,000,000 0 0 0

1,000,001 - 5,000,000 0 0 0

over 5,000,000 0 0 0

Total1 7,213 14,513 2,012

Office of Tax Analysis July 13, 2021

1 Returns with negative income are excluded from the lowest income class but included in the 

total line. Dependent returns are excluded from the calculations. Returns with a tax change of at 

least $5 are included in the calculations. 
Administration’s Budget for FY2022

16

Table 5

Estimated Benefit from

American Opportunity Tax Credit (AOTC) and Lifetime Learning Credit (LLTC)1

Taxable Year 2022 – Administration’s Budget

Adjusted Tax Units2 Total Average

Gross Income Benefiting Benefit Benefit

($) (Thousands) ($Millions) ($)

0 - 15,000 2,169 1,787 824

15,001 - 30,000 2,680 3,015 1,125

30,001 - 40,000 1,403 1,976 1,408

40,001 - 50,000 1,070 1,640 1,533

50,001 - 60,000 804 1,223 1,521

60,001 - 75,000 1,034 1,603 1,550

75,001 - 100,000 1,264 2,043 1,616

100,001 - 200,000 2,570 4,610 1,794

200,001 - 500,000 0 0 0

500,001 - 1,000,000 0 0 0

1,000,001 - 5,000,000 0 0 0

over 5,000,000 0 0 0

Total3 13,054 17,955 1,375

Office of Tax Analysis July 13, 2021

1 The Omnibus Appropriations and Covid-19 Relief Act passed in December 2020 expanded the 

phaseout of the LLTC to the higher AOTC levels.

2 The filing status of 45 percent of all returns with an education credit was single.

3 Returns with negative income are excluded from the lowest income class but included in the 

total line. Dependent returns are excluded from the calculations. Returns with a tax change of at 

least $5 are included in the calculations.
Administration’s Budget for FY2022

17

Table 5A

Estimated Benefit from

LLTC (with New Expanded Phaseout Range)1

Taxable Year 2022 – Administration’s Budget

Adjusted Tax Units2 Total Average

Gross Income Benefiting Benefit Benefit

($) (Thousands) ($Millions) ($)

0 - 15,000 99 12 119

15,001 - 30,000 733 381 519

30,001 - 40,000 535 392 733

40,001 - 50,000 442 367 830

50,001 - 60,000 380 334 878

60,001 - 75,000 520 452 869

75,001 - 100,000 596 450 755

100,001 - 200,000 1,052 852 810

200,001 - 500,000 0 0 0

500,001 - 1,000,000 0 0 0

1,000,001 - 5,000,000 0 0 0

over 5,000,000 0 0 0

Total3 4,357 3,239 743

Office of Tax Analysis July 27, 2021

1 The Omnibus Appropriations and Covid-19 Relief Act passed in December of 2020 expanded 

the phaseout of the LLTC to the higher AOTC levels.

2The filing status of 45 percent of all returns with an education credit was single.

3 Returns with negative income are excluded from the lowest income class but included in the 

total line. Dependent returns are excluded from the calculations. Returns with a tax change of at 

least $5 are included in the calculations.
Administration’s Budget for FY2022

18

Table 5B

Estimated Benefit from

American Opportunity Tax Credit (AOTC)1

Taxable Year 2022 – Administration’s Budget

Adjusted Tax Units2 Total Average

Gross Income Benefiting Benefit Benefit

($) (Thousands) ($Millions) ($)

0 - 15,000 2,069 1,751 846

15,001 - 30,000 1,947 1,853 952

30,001 - 40,000 870 946 1,087

40,001 - 50,000 641 767 1,196

50,001 - 60,000 435 528 1,214

60,001 - 75,000 539 649 1,205

75,001 - 100,000 719 897 1,248

100,001 - 200,000 1,663 1,964 1,181

200,001 - 500,000 0 0 0

500,001 - 1,000,000 0 0 0

1,000,001 - 5,000,000 0 0 0

over 5,000,000 0 0 0

Total3 8,941 9,413 1,053

Office of Tax Analysis July 27, 2021

1 The Omnibus Appropriations and Covid-19 Relief Act passed in December expanded the 

phaseout of the LLTC to the higher AOTC levels.

2 The filing status of 45 percent of all returns with an education credit was single.

3 Returns with negative income are excluded from the lowest income class but included in the 

total line. Dependent returns are excluded from the calculations. Returns with a tax change of at 

least $5 are included in the calculations.
Administration’s Budget for FY2022

19

Table 5C

Estimated Benefit from

Refundability of the American Opportunity Tax Credit (AOTC)1

Taxable Year 2022 – Administration’s Budget

Adjusted Tax Units2 Total Average

Gross Income Benefitting3 Benefit Benefit

($) (Thousands) ($Millions) ($)

0 - 15,000 2,064 1,749 847

15,001 - 30,000 1,749 1,499 857

30,001 - 40,000 497 343 689

40,001 - 50,000 209 169 808

50,001 - 60,000 78 63 798

60,001 - 75,000 42 43 1,022

75,001 - 100,000 20 18 900

100,001 - 200,000 12 11 947

200,001 - 500,000 0 0 0

500,001 - 1,000,000 0 0 0

1,000,001 - 5,000,000 0 0 0

over 5,000,000 0 0 0

Total4 4,731 3,953 836

Office of Tax Analysis July 27, 2021

1 The Omnibus Appropriations and Covid-19 Relief Act passed in December expanded the 

phaseout of the LLTC to the higher AOTC levels.

2 The filing status of 45 percent of all returns with an education credit was single.

3 Even though all 8.9 million tax units claiming an AOTC claim the 40 percent of the credit that is 

refundable, only those with insufficient tax liability to offset their full credit benefit from this 

refundability. Tax units that have sufficient tax liability would receive their full credit even without 

refundability and are therefore not included among the 4.7 million benefiting from refundability.

4 Returns with negative income are excluded from the lowest income class but included in the 

total line. Dependent returns are excluded from the calculations. Returns with a tax change of at 

least $5 are included in the calculations.
Administration’s Budget for FY2022

20

Table 6

Estimated Benefit from 

Seven Main Tax Credits for Families with Child and Education Expenses1

Taxable Year 2022 – Administration’s Budget

Adjusted Tax Units Total Average

Gross Income Benefiting Benefit Benefit

($) (Thousands) ($Millions) ($)

0 - 15,000 17,135 57,040 3,329

15,001 - 30,000 15,377 84,517 5,496

30,001 - 40,000 6,266 35,998 5,745

40,001 - 50,000 4,824 23,850 4,944

50,001 - 60,000 3,917 18,257 4,662

60,001 - 75,000 4,564 21,121 4,628

75,001 - 100,000 5,434 27,272 5,018

100,001 - 200,000 10,104 51,452 5,092

200,001 - 500,000 3,754 12,277 3,270

500,001 - 1,000,000 14 20 1,353

1,000,001 - 5,000,000 0 0 0

over 5,000,000 0 0 0

Total2 71,820 333,122 4,638

Office of Tax Analysis July 16, 2021

1 The seven credits are: child tax credit (CTC), additional child tax credit (ACTC), tax credit for 

other dependents (ODTC), earned income tax credit (EITC), child and dependent care tax credit 

(CDCTC), American opportunity tax credit (AOTC), and lifetime learning tax credit (LLTC).

2 Returns with negative income are excluded from the lowest income class but included in the 

total line. Dependent returns are excluded from the calculations. Returns with a tax change of at 

least $5 are included in the calculations.
Administration’s Budget for FY2022

21

Appendix

Brief Description of the Main Tax Provisions for Families as Proposed in the 

Administration’s Budget for Fiscal Year 2022

Taxpayers with dependent children pay lower taxes than similar families without children 

through the following major tax provisions of the individual income tax. These provisions, as 

proposed for taxable year 2022, are described below. A more complete description of the 

provisions under current law and the proposals is available in the General Explanations of the 

Administration’s Fiscal Year 2022 Revenue Proposals (the Greenbook).4

• Filing status – Unmarried taxpayers who are supporting a dependent child may be eligible to 

file as a head of household, instead of as a single filer. Head of household status has a higher 

standard deduction, and income is taxed under a separate rate bracket structure that is more 

generous than the brackets available to single filers.

• Child credit (CTC) – Taxpayers may be eligible for a fully refundable child credit of $3,600 

for each child up through age 5 and $3,000 for each child age 6 through age 17 with a valid 

social security number. Taxpayers with insufficient tax liability to claim the entire CTC may 

claim the full amount remaining as an additional child credit (ACTC). The portion of the 

credit in excess of $2,000 per child phases out sequentially with income in excess of 

$150,000 of modified AGI for married joint filers or surviving spouses, $112,500 for head of 

household filers, and $75,000 for all other filers, with a modified rule for large families. The 

remaining CTC (combined with the amount of other dependent credit [see below]) phases out 

beginning at $200,000 of modified adjusted gross income (AGI) ($400,000 for married 

couples filing a joint return).5

• Other dependent credit (ODTC) – Taxpayers may be eligible for a non-refundable other 

dependent credit of up to $500 for each qualifying dependent relative or child who is not 

eligible for the child credit. The ODTC (combined with the amount of CTC [see above]) 

phases out beginning at $200,000 of modified AGI ($400,000 for married couples filing a 

joint return).

• Earned income tax credit (EITC) – Taxpayers with earned income may be eligible for a 

refundable EITC. The amount of EITC a taxpayer may receive initially increases as the 

taxpayer earns more income, then remains constant over a range of earned income, and then 

decreases as earned income (or modified adjusted gross income, if greater) increases further. 

The credit begins to phase out at a higher income level for married taxpayers and is more 

generous for families with more children (up to three children). 

o Taking the one-child schedule for a single parent as an example with estimated 

parameters for 2022, the credit phases in with earnings at a rate of 34 percent, until 

the maximum credit of $3,679 at $10,820. The credit begins phasing out with 

4 The Greenbook is available here: https://home.treasury.gov/system/files/131/General-Explanations-FY2022.pdf 5 Up to 50 percent of the credit may be received in advance during the 2021; the first monthly payments based on 

predicted eligibility were disbursed in July. This document does not otherwise consider the advance or the related 

safe harbor.
Administration’s Budget for FY2022

22

modified AGI (or earnings if greater) in excess of $19,840 at a rate of 15.98 percent, 

phasing out completely at $42,861.

6

o Under the Administration’s Budget for taxpayers with no qualifying children 

(including those living with children they do not claim), for taxable year 2022 the 

phase-in and phaseout rate is 15.3 percent, and the maximum credit is $1,527. The 

credit is fully phased in at earnings of $9,980 and begins phasing out at the greater of 

earnings or modified AGI at $11,800.

o The EITC for married taxpayers who file a joint return begins to phase out at incomes 

$6,050 higher than for other filers.

• Child and dependent care credit (CDCTC) – Taxpayers with expenses for caring for a 

qualifying individual, who may be a child or an adult, may be eligible for a non-refundable 

CDCTC. The credit is generally available for working taxpayers with dependent children 

under age 13, but it is also available for working taxpayers supporting parents or other 

dependents needing care. The maximum credit match rate is 50 percent of up to $8,000 of 

childcare expenses for 1 child or dependent and $16,000 for 2 or more children or 

dependents. The credit match rate is phased down from 50 percent to 20 percent for 

taxpayers with AGI between $125,000 and $183,000. The credit rate is 20 percent for a 

taxpayer with AGI between $183,000 and $400,000. The phase down of the match rate then 

continues and is complete for taxpayers with AGI of $438,000 or more.7

• American opportunity tax credit (AOTC) and lifetime learning credit (LLTC) – Taxpayers 

with expenses related to their or their dependent children’s post-secondary education may be 

eligible for the partially refundable AOTC of up to $2,500, with up to $1,000 of the credit 

being refundable. The credit phases out beginning at $80,000 of modified AGI ($160,000 for 

joint filers) and is available for 4 years. Students must attend at least half time to be eligible 

for this credit. Taxpayers may also be eligible for a nonrefundable LLTC for 20 percent of up 

to $10,000 of expenses required for enrollment per return. The phaseout range is the same as 

for the AOTC and there is no limit on the number of years the credit may be claimed or on 

the intensity of study. The expenses of any one student may be applied to only one credit.

6 Parameters shown are Treasury estimates for taxable year 2022. The end of the phase-in range and the end of the 

plateau are indexed for inflation. 7 Taxpayers whose employers offer the benefit may also exclude from income for income and payroll tax purposes 

amounts contributed to a dependent care flexible spending program, up to certain limits. This exclusion is not 

modeled here.