Don't Miss Out on These Federal Income Tax Breaks if You Have a New Child or One on the Way
A new child can change everything about your life, including how much you save on federal income taxes
After you’ve spent months preparing for your new arrival, taxes are probably the last thing on your mind. Yet a baby can mean big savings: tax credits and deductions that weren’t available before. Here’s your up-to-date guide to claiming every break the IRS offers new and expectant parents. For personalized advice, consult a qualified tax professional.
The information below applies to births and adoptions alike, see our adoption tax article for more details on adoption-specific credits and deductions.
- Obtain Your Child’s Social Security Number Immediately
- Child Tax Credit (CTC)
- Credit for Other Dependents
- Child and Dependent Care Credit
- Head of Household Filing Status
Your newborn or newly adopted child must have a valid Social Security number (SSN) by the time you file. Hospitals typically assist with the SSN application when you request the birth certificate. Without that SSN, you’ll face delayed refunds, and a $50 penalty per dependent claimed without a valid SSN.
2024 limits: Up to $3,600 per child under age 6, and $3,000 per child ages 6–17. Of that, up to $2,000 is refundable as the Additional Child Tax Credit (ACTC).
Eligibility requirements: The child must be under 18 by December 31, a U.S. citizen or resident, claimed as your dependent, and have lived with you over half the year. Your modified AGI phases out the credit above $200,000 ($400,000 if married filing jointly).
If your dependent doesn’t qualify for the CTC, such as a 17-year-old or an elderly parent—you may still claim up to $500 per dependent under this nonrefundable credit. Dependents must have a valid SSN, ITIN or ATIN.
If you pay for child care so you (and your spouse) can work or look for work, you may claim 20–35% of up to $8,000 in expenses for one child, or $16,000 for two or more. Eligible providers must be reported with name, address and TIN. You cannot claim care paid to your spouse, your child under age 19, or a dependent.
Single parents who qualify as head of household receive a higher standard deduction and more favorable tax brackets. To qualify, you must be unmarried (or considered unmarried), pay over half the cost of keeping up your home, and have a qualifying person (your child) living with you for more than half the year.