Life Tax Benefits for Having Dependents Read the Article Open Share Drawer Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Pinterest (Opens in new window)Click to print (Opens in new window) Written by Ginita Wall Published Jun 7, 2024 3 min read Reviewed by Jotika Teli, CPA Lena Hanna, CPA Even though the dependency exemption was eliminated under the tax reform, there are still some tax benefits you can take advantage of to maximize your tax refund if you have dependents. These tax benefits can significantly reduce or even eliminate your tax liability. Some of the credits discussed are refundable, which means that even if you don’t have any tax liability to offset, you will receive a refund. While we’ll help you to understand the tax benefits of having dependents below, don’t worry about remembering these rules come tax time. TurboTax will ask you simple questions about you and give you the tax deductions and credits you’re eligible for based on your answers. Child Tax Credit: You may be eligible for the Child Tax Credit, which is a tax credit that you get for your dependent kids. It’s even better than a tax deduction because it reduces your taxes dollar-for-dollar. For tax year 2024 (the taxes you file in 2025), the Child Tax Credit is worth up to $2,000 per qualifying child under age 17. You will be eligible for the full credit if your modified adjusted gross income is $400,000 or under for those who are married filing jointly and $200,000 or under for all other filers. For tax year 2024, $1,700 of this credit is refundable, up $100 from tax year 2023. Other Dependent Credit: If you don’t qualify for the Child Tax Credit and your dependent child is over 17 or you support a friend or a relative, you may still be able to claim the Other Dependent Credit of up to $500 per qualifying person. The credit begins to phase out if your adjusted gross income is greater than $200,000 (or $400,000 for married filing joint couples). For tax year 2024, this credit is nonrefundable. Child and Dependent Care Credit: If you pay for childcare, there is a tax credit that you may qualify for at tax time. If you are working or actively seeking work, and you pay childcare for your dependent who is under the age of 13 (no age limit if disabled), you can claim the Child and Dependent Care Credit. Nursery school, private kindergarten, after-school programs, daycare, and even summer and winter day camps are all qualifying expenses. This credit is a dollar-for-dollar reduction of your taxes based on your childcare expenses and is a nonrefundable credit. The expense limit for tax year 2024 is $3,000 for one qualifying individual and $6,000 for two or more qualifying individuals. The percentage used to calculate the credit is up to 35% of expenses, so the maximum credit is up to $1,050 for one qualifying individual or up to $2,100 for two or more qualifying individuals. This credit is reduced for taxpayers with income over $15,000. Earned Income Tax Credit (EITC): There’s a special tax credit available if your wages or self-employment income are below a certain income level. The amount of credit you receive is based on your income, filing status, and how many qualifying kids you have. The refundable tax credit you can receive ranges from a maximum of $7,830 if you have three or more children to $632 if you have no children for tax year 2024. Unlike some other tax credits, the Earned Income Tax Credit is refundable, so if the credit is greater than the tax you owe, you can still receive the difference as a tax refund. No matter what moves you made last year, TurboTax will make them count on your taxes. Whether you want to do your taxes yourself or have a TurboTax expert file for you, we’ll make sure you get every dollar you deserve and your biggest possible refund – guaranteed. Previous Post How to File Taxes in Multiple States After Moving Next Post Happy National Children’s Day! Here’s What Having a Child Means… Written by Ginita Wall More from Ginita Wall 92 responses to “Tax Benefits for Having Dependents” « Older Comments Newer Comments » My niece is 24 years old living on her own. She has a 6 month old son and was told she couldn’t collect earned income credit because you have to be 25 years of age to be able to collect it. Is this true? Sincerely Jill Chinderle Reply I’m not an expert, but it sounds like your niece is probably eligible for the Earned Income Credit. The requirement of being between 25 and 65 only applies if she does not have a qualifying child. Here’s the IRS publication on the Earned Income Credit: http://www.irs.gov/Individuals/EITC,-Earned-Income-Tax-Credit,-Questions-and-Answers Reply I have 4 children and married we file together and normally every year get close to 8000.00 or 9000.00 I was told u can only claim 3 children not 4 and my son dad wants to claim him this yr is it true I can only count 3 of my kids anyways? And should let him claim my son or would it affect me and my son still count for doing my taxes and be beneficial to me? Reply Have you gotten an answer yet I have the same issue. Reply Yes that is true. You can put as many dependent a down but while claiming children you only get money back for 3 so you should allow your sons father to claim him. Reply I filed exempt this year But they was still taking tax out I made less than 44.000 I have a one-year old and a six year old will I get anything back and if so how much for two kids?? Reply So i started working April of 2014 but ended up being pregnant and went on maternity leave for October and November went back to work in December i also have a three year old. Would I get a good tax return or will I owe? Reply Hi I am self employed I lost money this year in fact I lost everything I made 1000.00 in income this year not including help from family. Am I not going to get any refund for my three children now that I need it the most? Reply I worked cleaning houses started out as a temp job for 2 weeks making 10$ an hour for a reality company I filled out a 1099 when I started after my two weeks was up and I was supposed to be done with the job they liked my work and had me doing more work with other Realtors and their clients cleaning houses and I was paid cash I made about $5,500 dollars I have one dependent do I need to file my taxes and how do I go about getting a copy of my 1099? Do I get Earned Income Credit if so do I not get the full amount because I didn’t work all year or make enough?? Reply If my husband made 35,000 laast year and he cares me and my two children what is An estimate of his refund!! Reply if filing married with four dependents myself and my son my wife and her 3 kids, is there a way to determine the precentage of the return that is hers or mine? Reply I would love to know this too😀 im in the same situation. Reply Hi I have twins that are 18 but in their first year of college. I was told i could still clam them, but am I still able to get any extra credits? I am not married and file head of house hold. Thank You Reply My baby is three months can I carry her …will I get less on my return then usual Reply No you will be able to get tge full amount in tax credit as if she were here the whole year. 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My niece is 24 years old living on her own. She has a 6 month old son and was told she couldn’t collect earned income credit because you have to be 25 years of age to be able to collect it. Is this true? Sincerely Jill Chinderle Reply
I’m not an expert, but it sounds like your niece is probably eligible for the Earned Income Credit. The requirement of being between 25 and 65 only applies if she does not have a qualifying child. Here’s the IRS publication on the Earned Income Credit: http://www.irs.gov/Individuals/EITC,-Earned-Income-Tax-Credit,-Questions-and-Answers Reply
I have 4 children and married we file together and normally every year get close to 8000.00 or 9000.00 I was told u can only claim 3 children not 4 and my son dad wants to claim him this yr is it true I can only count 3 of my kids anyways? And should let him claim my son or would it affect me and my son still count for doing my taxes and be beneficial to me? Reply
Yes that is true. You can put as many dependent a down but while claiming children you only get money back for 3 so you should allow your sons father to claim him. Reply
I filed exempt this year But they was still taking tax out I made less than 44.000 I have a one-year old and a six year old will I get anything back and if so how much for two kids?? Reply
So i started working April of 2014 but ended up being pregnant and went on maternity leave for October and November went back to work in December i also have a three year old. Would I get a good tax return or will I owe? Reply
Hi I am self employed I lost money this year in fact I lost everything I made 1000.00 in income this year not including help from family. Am I not going to get any refund for my three children now that I need it the most? Reply
I worked cleaning houses started out as a temp job for 2 weeks making 10$ an hour for a reality company I filled out a 1099 when I started after my two weeks was up and I was supposed to be done with the job they liked my work and had me doing more work with other Realtors and their clients cleaning houses and I was paid cash I made about $5,500 dollars I have one dependent do I need to file my taxes and how do I go about getting a copy of my 1099? Do I get Earned Income Credit if so do I not get the full amount because I didn’t work all year or make enough?? Reply
If my husband made 35,000 laast year and he cares me and my two children what is An estimate of his refund!! Reply
if filing married with four dependents myself and my son my wife and her 3 kids, is there a way to determine the precentage of the return that is hers or mine? Reply
Hi I have twins that are 18 but in their first year of college. I was told i could still clam them, but am I still able to get any extra credits? I am not married and file head of house hold. Thank You Reply