Teipen Logo

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.

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.

Make note of these updated IRS-approved tax credits and deductions:

  • 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..

And lastly, and most importantly, Congratulations!