Child Tax Credits

There are lots of new and exciting challenges with a new child, and how your new child will affect your taxes is probably not even on your radar. No worries, it’s nothing but good news.

First things first: Do you have to prorate tax breaks based on when your child was born? Nope. Even if born on the last day of the year, the IRS counts little Johnny or Susie as having lived with you all year. That means you get the full value of the tax breaks available to parents.


Let’s start with the most basic tax break, the personal exemption. That’s a flat amount subtracted from your taxable income. For 2015, that’s $4,000. You get one exemption for each taxpayer (parent) and dependent on the return.

Child Tax Credit

Next up is the Child Tax Credit, which gives you up to $1,000 for each eligible child dependent. The credit is refundable, meaning you can get a refund from it even if you have no tax liability for the year.

There are income limitations on who can get the credit. If you’re single, you can claim the credit if your AGI is less than $75,000. If you’re married filing jointly, that figure goes up to $110,000, and if you’re filing separately, it’s $55,000. In addition to the requirements for a qualifying child, the child must meet these requirements:

  • The child has to be under age 17 at the end of the year. If he or she turns 17 on the last day of the year, sorry, that child is ineligible.
  • You must claim the child as a dependent on your return.
  • The child can’t have provided over half of their own support for the year.

Additional Child Tax Credit

This is one poorly named credit. The name doesn’t mean it’s a credit for an additional child, it means it’s an additional credit for a child. So if you don’t have two children, don’t fret. This credit is for parents whose AGI is too high to claim the full Child Tax Credit. And like the Child Tax Credit, the Additional Child Tax Credit is refundable.

When you file your taxes with, dependent-related tax breaks are figured for you automatically. All you have to do is fill out the Dependent screen for each child, and we’ll take care of the rest.

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