Other People Are Reading
Exemptions for Kids
Children who qualify as dependents allow you, as the parent, to claim tax exemption. For each dependent and each exemption, you shelter $3,950 of your income from taxes, as of the time of publication. To claim this exemption, the child must have a Social Security number. The exemption is available even if the child was born on Dec. 31, the last day of the tax year, but it ends when the child reaches 19 -- or 24 if she's a full-time student. The Internal Revenue Service also does not recognize dependents if they live away from home for more than half the year or provide more than half of their own support.
Child Tax Credit
Qualifying children also offer a tax credit worth up to $1,000, which is subtracted directly from your tax liability. The IRS rules gradually phase out the credit amount for higher incomes, beginning at $75,000 for single tax filers and $110,000 for those filing jointly as a married couple. If the credit zeroes out your tax
bill and results in a negative amount, you may be able to claim an additional tax credit, which is paid in the form of a refund. For you to claim the child tax credit, the child must be under the age of 17 and claimed as a dependent on your tax return.
Child Expense Credit
The IRS allows child and dependent care expenses as a credit, limiting this write-off to a percentage of your expenses. The expense amount used to figure this percentage is limited to $3,000 for one child and $6,000 for two or more. The child or children must be under the age of 13, and you must identify the caregiver on your tax return. As an additional condition, the care expenses must be necessary for you to work or to look for work. If you're filing a joint return, the expenses must be necessary for both spouses to work or look for work.
More Like This