### Question
How is the "phaseout percentage" defined?


### Answer
The term **phaseout percentage** is defined in *26 U.S.C. § 21* as follows -

> 20 percent reduced (but not below zero) by 1 percentage point for each $2,000 (or fraction thereof) by which the taxpayer's adjusted gross income for the taxable year exceeds $400,000

#### Citation:
  - *26 U.S.C. § 21*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter A-Determination of Tax Liability > PART IV-CREDITS AGAINST TAX > Subpart A-Nonrefundable Personal Credits**

