Federal Income Tax Brackets and Rates
Tax Year 2021
| Tax Rate | For Single Filers, Taxable Income | For Married Individuals Filing Joint Returns, Taxable Income | For Heads of Households, Taxable Income |
|---|---|---|---|
| 10% | Up to $9,950 | Up to $19,900 | Up to $14,200 |
| 12% | $9,951 to $40,525 | $19,901 to $81,050 | $14,201 to $54,200 |
| 22% | $40,526 to $86,375 | $81,051 to $172,750 | $54,201 to $86,350 |
| 24% | $86,376 to $164,925 | $172,751 to $329,850 | $86,351 to $164,900 |
| 32% | $164,926 to $209,425 | $329,851 to $418,850 | $164,901 to $209,400 |
| 35% | $209,426 to $523,600 | $418,851 to $628,300 | $209,401 to $523,600 |
| 37% | Over $523,600 | Over $628,300 | Over $523,600 |
| Filing Status | Deduction Amount |
|---|---|
| Single | $12,550 |
| Married Filing Jointly | $25,100 |
Head of Household | $18,800 |
Source: Internal Revenue Source | |
| Filing Status | Exemption Amount |
|---|---|
| Unmarried Individuals | $73,600 |
| Married Filing Jointly | $114,600 |
| Filing Status | Threshold |
|---|---|
| Unmarried Individuals | $523,600 |
| Married Filing Jointly | $1,047,200 |
Earned Income Tax Credit (EITC)
The maximum Earned Income Tax Credit (EITC) in 2021 for single and joint filers is $1502, if the filer has no qualifying children (Table 5). The maximum credit is $3,618 for one child, $5,980 for two children, and $6,728 for three or more children. The credit for filers without qualifying children was significantly expanded for tax year 2021 in the American Rescue Plan Act (ARPA) enacted in March 2021.
| Filing Status | No Children | One Child | Two Children | Three or More Children | |
|---|---|---|---|---|---|
| Single or Head of Household | Income at Max Credit | $9,820 | $10,640 | $14,950 | $14,950 |
| Maximum Credit | $1502 | $3,618 | $5,980 | $6,728 | |
| Phaseout Begins | $11,610 | $19,520 | $19,520 | $19,520 | |
| Phaseout Ends (Credit Equals Zero) | $21,430 | $42,158 | $47,915 | $51,464 | |
| Married Filing Jointly | Income at Max Credit | $9,820 | $10,640 | $14,950 | $14,950 |
| Maximum Credit | $1502 | $3,618 | $5,980 | $6,728 | |
| Phaseout Begins | $17,550 | $25,470 | $25,470 | $25,470 | |
| Phaseout Ends (Credit Equals Zero) | $27,380 | $48,108 | $53,865 | $57,414 |
Child Tax Credit
The American Rescue Plan Act (ARPA) enacted in March 2021 significantly expanded the Child Tax Credit in several ways. The expansion expires after 2021. The Child Tax Credit (CTC) is $3,000 for children 6 and older and $3,600 for children under 6. Half the credit will be advanced to families monthly, at $250/month for older children and $300/month for younger children, while the other half will be received on tax returns. It is fully available and refundable to households with no income, unlike the Child Tax Credit’s former design. The changes only apply to tax year 2021.
| For Unmarried Individuals, Taxable Income Over | For Married Individuals Filing Joint Returns, Taxable Income Over | For Heads of Households, Taxable Income Over | |
|---|---|---|---|
| 0% | $0 | $0 | $0 |
| 15% | $40,400 | $80,800 | $54,100 |
| 20% | $445,850 | $501,600 | $473,750 |
| Filing Status | Threshold |
|---|---|
| Unmarried Individuals | $164,900 |
| Married Filing Jointly | $329,800 |
Annual Exclusion for Gifts
In 2021, the first $15,000 of gifts to any person are excluded from tax. The exclusion is increased to $159,000 for gifts to spouses who are not citizens of the United States.