The first tax break you get is an exemption for your dependent child. An exemption is money you can exclude from your taxable income based on the fact that you are financially responsible for someone, including yourself. When someone says “I’m claiming 3 on my taxes,” they’re talking about exemptions. For each child under the age 19 that you lives with you most of the year and you provide the majority of financial support for, you can claim one exemption. (If your kid is in college, you can extend that age to 24.) For each child you claim, you receive a $3700 tax deduction from your total taxable income for the year.
The second tax break a parent gets is the child tax credit, which provides $1000 credit to your tax bill for each qualifying child you claim. If your child credit exceeds your tax bill, you get that money back as a refund. Your kid must be 17 or under by the end of the tax year and lived with you for more than half the year. You also must have provided more than half his support for that year and he didn’t file a tax return. When
And finally, you get a dependent care credit to offset any money you spent on your kid’s daycare expenses. As usual with these tax breaks, your kid has to live with you for most of the year and you have to provide more than half of the financial care for him. However, this credit requires that your child be under the age of 13. And, the limit for this credit is $3000 for the year.
