
New parent in 2024?
Posted on May 23, 2024
Congratulations! And — if you just became a parent this year, you already know how expensive it can be to welcome a new child into your family.
Apparently (pun intended), the IRS understands this as well – and has established some special tax situations and benefits for you. Tax breaks for parenting expenses can result in a lower tax bill and a higher refund. Here’s what to know and do:
New parents should:
- Get your child a Social Security or Individual Tax Identification number
Confirming a child’s birth is the only way the IRS can verify that the parent is eligible for the credits and deductions they claim on their tax return.
- To claim parental tax breaks, you must first have your child (or dependent’s) Social Security number, Adoption Tax Identification Number or Individual Tax Identification Number.
Check your withholding info:
- Having a new family member can make you eligible for new credits and deductions, which can greatly change your tax liability. Use the IRS Tax Withholding Estimator to check your withholding information.
- Then provide your employer with an updated Form W-4, Employee’s Withholding Certificate, if you wish to change how much tax is withheld from your paycheck.
Make note of these updated IRS-approved tax credits and deductions:
- Child Tax Credit
If you claim at least one child as a dependent on your tax return, you may be eligible for the Child Tax Credit. For help figuring out if a child qualifies for this credit, check Does My Child/Dependent Qualify for the Child Tax Credit or the Credit for Other Dependents?
- Child and Dependent Care Credit
If you paid someone to take care of your child/ren (or another member of your household) while you work, you may qualify for the Child and Dependent Care Credit regardless of your income. - Taxpayers who pay for daycare expenses may be eligible to claim up to 35% of those expenses with certain limits.
- Adoption Tax Credit
In the process of adoption, but don’t have your child yet? This credit lets families who are in the adoption process during the tax-year claim eligible adoption expenses for each eligible child. You can apply the Adoption Tax Credit to international, domestic, private and public foster care adoptions.
- Earned Income Tax Credit
The Earned Income Tax Credit helps low- to moderate-income families get a tax break. If you qualify, you can use this credit to reduce the taxes you owe – and possibly increase your tax refund. Those who earned $63,398 or less may be eligible for this valuable tax credit..
- Credit for Other Dependents
Taxpayers with dependents who don’t qualify for the Child Tax Credit may be able to claim the Credit for Other Dependents. You can use the Does My Child/Dependent Qualify for the Child Tax Credit or the Credit for Other Dependents? tool on IRS.gov to help determine if you are eligible. (You can claim this credit in addition to the Child and Dependent Care Credit and the Earned Income Credit.)
And lastly, and most importantly, Congratulations!