Raising children is expensive. At least when it comes to taxes, kids can help reduce the amount you owe Uncle Sam.
Here are six child-related tax credits parents may be able to take advantage of when filing their 2024 taxes:
1. Child Tax Credit
Tax credits are different from tax deductions, which lower your taxes by reducing the amount of income that is taxable.
“If you’re able to claim your child as a dependent, you may be eligible for a tax credit, which is actually even better than a tax deduction because it reduces your taxes dollar for dollar,” says Lisa Greene-Lewis, a certified public accountant and spokesperson for TurboTax.
Some tax credits, including the child tax credit, are refundable or partially refundable, which means taxpayers can receive a refund even if the amount of tax they owe is zero.
The child tax credit is partially refundable; you can receive up to $1,700 as a refund on your 2024 tax return, up from $1,600 the previous year.
[Read: Pros and Cons of Waiting Until the Last Minute to File Your Taxes]
In recent years, the child tax credit was more generous than it is now. In March 2021, the American Rescue Plan increased it from $2,000 to $3,000 per child under age 17, or $3,600 for children under age 6 — part of which was sent to parents throughout the year in monthly payments.
But that provision expired in 2022, when the child tax credit returned to $2,000 per qualifying child.
Something else to remember, says Beth Logan, an enrolled agent and the owner of Kozlog Tax Advisors in Cheltenham, Pennsylvania: “When a child turns 17, the child tax credit changes to the dependent tax credit, which is only $500. Crazy, I know. It’s like Congress thinks that 17-year-olds are cheaper than 16-year-olds.”
Logan says taxpayers should review their W-4s annually, “especially in any year when a child turns 17 and any year when a child finishes school.”
Families are eligible for the credit if their modified adjusted gross income is $200,000 or less as a single filer, head of household filer or married couple filing separately.
If you’re married and filing jointly, you’re eligible for the child tax credit if your modified adjusted gross income is $400,000 or less. If you make more than that, the credit is reduced by $50 for each $1,000 of additional income that you have above the $200,000 or $400,000 threshold until the credit eventually reaches zero.
You’ll need to have provided at least half of your child’s financial support in 2024 to get the tax credit, and in most cases, your child needs to have lived with you for at least half of the year. If your child was born in 2024, even if it was on Dec. 31, you’re eligible to receive the full tax credit.
When it comes to claiming dependents on taxes, as long as they’re eligible (under 17), there’s no maximum number you can claim.
2. Child and Dependent Care Credit
The child tax credit is a big help for parents, but they’ll get even more assistance if they spend a lot on professional caregivers.
“Not to be confused with the child tax credit, the child and dependent care credit can assist you if you pay for child care,” Greene-Lewis says.
If you paid for services like a babysitter to watch over a qualifying child under age 13 or a disabled dependent of any age, you may be able to receive a tax credit between 20% and 35% of qualifying expenses up to $3,000 (the math works out to be between $600 and $1,050) for one child or dependent. If you have two or more children or dependents, you may be able to get a credit of up to 35% of $6,000 of qualifying expenses, or $2,100.
The credit is nonrefundable, and so once your tax bill hits zero, you won’t get any remaining amount as a refund.
The credit, Greene-Lewis says, helps to offset childcare expenses “for things like nursery school, private kindergarten, after-school programs and day care.”
[Read: Is Summer Camp Tax Deductible?]
3. Earned Income Tax Credit
If you have low to moderate income, you may qualify for the earned income tax credit, sometimes called the EITC or EIC.
“It’s worth noting that the earned income tax credit is also unlike other tax credits in that it is refundable, so you can still receive the difference as a tax refund if the credit is greater than the tax you owe,” Greene-Lewis says.
[Read: Do You Owe the IRS? How to Find Out]
Bottom line: The less you make, the more you’ll receive of the earned income tax credit (though you need to make more than $0). For 2024, the credit ranges from $4,213 to $7,830, depending on factors including number of kids, your earnings and your filing status. (If you have no qualifying kids and income below certain thresholds, the credit is $632.)
4. Adoption Tax Credit
For adoptions filed in 2024, families can claim a federal adoption tax credit of up to $16,810 per child. You’ll get that full amount if your modified adjusted gross income is below $252,150. If your income is between $252,151 and $292,150, you can receive partial credit, and if you have income above $292,150, you won’t qualify.
The adoption credit covers legal or agency fees, as well as travel costs you may have incurred as a result of the process. If you’re adopting a special needs child, you can claim the entire adoption credit even if it exceeds your expenses.
If the adoption was domestic and it fell through, you are still eligible for the adoption tax credit.
5. The American Opportunity Tax Credit
As noted, parents of college-aged kids generally don’t get to claim the child tax credit, since the financial break ends after age 17. But for older children, there are still some tax breaks parents may qualify for.
If your child is in college, the American opportunity tax credit covers 100% of eligible tuition and required fees up to $2,000, as well as 25% of the next $2,000, translating into a total maximum credit of $2,500 per year, per eligible student.
To claim the full credit, your modified adjusted gross income must be $80,000 a year or less ($160,000 or less if you’re married filing jointly). If your MAGI is between $80,000 and $90,000, you’ll get a partial credit (or between $160,000 and $180,000 for those married filing jointly). You can’t get the credit if your MAGI is over $90,000.
Forty percent of the tax credit, or $1,000, is refundable.
6. The Lifetime Learning Credit
The lifetime learning credit offers a 20% credit on up to $10,000 in qualified tuition costs and eligible expenses related to undergraduate, graduate and professional degree courses. To qualify, you’ll need a MAGI under $80,000 (or $160,000 for a joint married return). If you’re between $80,000 and $90,000 (and between $160,000 and $180,000 for joint filers), you’ll get a partial credit.
This credit is for anyone taking higher education courses at any time.
If you plan on taking these credits, you may want to bring in a tax professional or buy tax software because filing can get tricky.
For instance, both education credits can be claimed on the same tax return for 2024, but not for the same student or the same expenses.
Whether you prepare taxes on your own or bring in a professional, make sure you understand every tax break available to you as a parent.
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Kids and Taxes: 6 Tax Credits Parents Should Know About originally appeared on usnews.com
Update 03/04/25: This story was published at an earlier date and has been updated with new information.
