How Much Taxes Do You Get Per Child on Your Tax Return?

Understanding the tax benefits associated with having children can significantly impact a family’s financial planning. These benefits, primarily in the form of credits and deductions, are designed to help offset the costs of raising dependents.

Eligibility and Qualifying Dependents

Determining eligibility for child-related tax benefits requires understanding IRS guidelines, which can change annually. For the 2024 tax year, a qualifying child must be under 17 at the end of the year, a direct descendant or sibling, and must have lived with the taxpayer for more than half the year. Additionally, the child must not have provided more than half of their own support during the year.

The residency requirement ensures the child has a substantial connection to the taxpayer’s household. Temporary absences for school or medical care are acceptable if the child would have otherwise lived with the taxpayer. A valid Social Security number for each qualifying child is required by the tax return due date, including extensions, to claim the Child Tax Credit (CTC).

Calculating the Credit Amount

For the 2024 tax year, the CTC offers up to $2,000 per qualifying child, depending on the taxpayer’s income and filing status. The credit begins to phase out at income levels of $400,000 for married couples filing jointly and $200,000 for single filers.

The CTC is partially refundable, meaning taxpayers may receive a portion of the credit as a refund even if their tax liability is reduced to zero. This refundable portion, called the Additional Child Tax Credit (ACTC), is calculated as 15% of earned income above $2,500, up to $1,600 per child. This feature can provide extra financial support for low to moderate-income families.

Phase-Out Thresholds

Phase-out thresholds reduce the credit for higher-income taxpayers. For the 2024 tax year, the CTC decreases by $50 for every $1,000 of adjusted gross income (AGI) above $400,000 for married couples filing jointly and $200,000 for single filers. Taxpayers may consider strategies like deferring income or accelerating deductions to stay below these thresholds and maximize their credit.

Potential Refundable Portions

Refundable credits like the ACTC offer financial relief by providing refunds even when no taxes are owed. For 2024, the ACTC allows up to $1,600 per child, based on a percentage of earned income, which includes wages and salaries but excludes investment income. Taxpayers must follow IRS guidelines and file the appropriate forms to claim this benefit.

Relevant Filing Guidelines

Claiming the Child Tax Credit (CTC) and related benefits requires compliance with IRS filing requirements. The CTC is claimed using Form 1040, along with Schedule 8812 to calculate both the non-refundable and refundable portions of the credit. A valid Social Security number for each qualifying child must be provided by the tax return due date, including extensions. Without this, taxpayers will be ineligible for the CTC but may qualify for the Credit for Other Dependents, which offers up to $500 per qualifying individual.

Taxpayers should confirm their filing status is appropriate for claiming the credit. Filing as head of household may offer greater benefits than filing as single, provided the taxpayer meets the criteria, such as maintaining a home for a qualifying child for more than half the year.

Accurate records, including birth certificates, proof of residency, and evidence of financial support, should be maintained to substantiate claims. In the event of an IRS review, having these documents readily available can expedite the process. Electronic filing is recommended to minimize errors and speed up processing times.