Glossary
Phase-out
The income range where a credit or deduction shrinks gradually to zero instead of cutting off at once.
Rather than disappearing at a cliff, many tax benefits shrink by a fixed percentage of each extra dollar of income. The EITC phases out at roughly 16–21% per dollar (with children); the senior deduction phases out at 6% of MAGI above its threshold.
Phase-outs mean earning one more dollar never costs you more than a dollar of these benefits — a common misconception.