Children and Taxes
Understanding taxes can be tricky, especially when it involves children. Understanding how taxes impact your family is crucial for making informed financial decisions. In this page, we will break down the basics of children and taxes, covering important topics like tax credits, deductions, and how dependents affect your tax return.
Whether you are a new parent or managing a growing family, this information will help you maximize your tax benefits and ensure you are not missing out on valuable savings. Consider the following credits and deductions when it comes to a child or children and your income taxes.
Ready to maximize your tax return? Try the eFile Tax App! Answer a few simple questions, and it will apply all the credits and deductions you qualify for. Plus, use our free calculators and tools to check your eligibility for child-related credits and estimate your savings based on your income and filing status.
Child Related Tax Questions and Answers
When you file your taxes, claiming dependents is one of the most effective ways to save money on your return. Use the table below to navigate to various child or dependent tax savings pages.
Child Tax Credit
The
tax refund calculator includes the Child Tax Credit for estimating purposes. The maximum CTC is $2,000 which can be claimed on your tax return via Schedule 8812 if you have income under $200,000 or $400,000 for married filing jointly.
See if you qualify for the CTC - eFile.com will figure your credit for you as you enter information.
Additional Child Tax Credit
The Additional Child Tax Credit is fully refundable - this means you may be able to create a refund or add this additional amount to your already existing tax refund. For all years excluding 2021, the Additional CTC is the only portion of the Child Tax Credit that is refundable and it can only be claimed with earned income.
Child and Dependent Care Expenses
The
Child and Dependent Care Expense Credit or CDCC serves to offset some of the costs of paying for childcare so the parent or parents can work or look for work. You may be eligible to claim up to $2,100 based on how much you spent on childcare and the amount of dependents you claim. Determine your eligibility for the CAREucator tool.
Child, Children as Dependent(s)
A
qualifying dependent on your taxes is often a child of yours, but can also be a relative or other child you may take care of. Learn if you can claim your son, daughter, niece, nephew, step-child, or other person on your taxes.
Credit for Other Dependents
The Credit for Other Dependents can be claimed on a tax return if you claim a dependent who is over age 17 and does not qualify you for other dependent tax credits. This tax credit is nonrefundable and is worth up to $500.
Child-Related Education Savings, Credits
If your dependent goes to college, you may be eligible for certain
education savings on your tax return. You can also invest in different accounts to prepare for college payments that may save you money come tax time.
Children and the EITC
As a moderate-to-low income taxpayer, you can generally claim the EITC. If you have dependents, your EITC greatly increases based on the number of dependents on your tax and your earned income. Calculate your EITC with the free
Earned Income Credit Calculator.
2021 Child Tax Credit
The
2021 Tax Refund Calculator includes the enhanced
CTC amounts which were made fully refundable for 2021 only - to claim the Child Tax Credit on your taxes for any other year, you will need to have
earned income. The maximum CTC for 2021 was $3,600 per dependent which can be claimed on your tax return via Schedule 8812.
Children or dependents on your income taxes can save you money. Learn what to do if someone wrongly claimed a dependent of yours. File your taxes on time and claim any dependents you are qualified to file for by indicating their relation to you on your return. When you use eFile.com to file your taxes online, we will help you input this information and generate all the necessary forms to maximize your next tax refund.
Publication 972 give you more in depth overview of the Child Tax Credit and other dependent information. See more details on the Child and Dependent Care Credit as well as the Earned Income Tax Credit.
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