Tax Credits for Families with Children

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Individuals who support children may be eligible for several tax credits to help reduce their federal income tax.

The child and dependent care tax credit is for families with children age 12 or younger. The credit is based on the amount of day care expenses. This credit is also available for dependents of any age who cannot care for themselves. 

The child tax credit is for families with children age 16 or younger. This credit may be partially refundable, which is helpful for taxpayers who have little or no federal tax liability. The credit is gradually reduced as a person’s income increases.

The earned income credit is for people age 25 to 64 who earn a modest income from working. The amount of the credit varies depending on a person’s income and how many dependents they support.

The adoption credit provides a tax benefit of up to $12,970 for adopting a child.

Families with kids in college may want to look at the American Opportunity Credit and the Lifetime Learning Credit. These credits are based on the student’s expenses for post-secondary education.

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