Family Matters

Birth of Child / Adoption
Birth of child

The addition of a child to your family whether you had a new baby or adopted a child may entitle you to several tax benefits. For a child born or adopted (the adoption must be final) during the year you will be able to claim the child as a dependent on your tax return and receive an exemption for the dependent. The exemption amount for 2015 is $4,000 for each dependent income other tax benefits you maybe be entitled to are:

  • Credit for Child and Dependent Care Expense
  • Child Tax Credit
  • Earned Income Tax Credit

 

For more information see Publication 503, 596 and 972 at www.irs.gov.


Child Attended Day Care

If you are a working parent, or you were working and are now looking for work, you may be able to claim a credit for your child care expenses. Your dependent (under the rules for qualifying child) must have been under age 13 when care was provided. The credit may be as much as $1,050 for the expenses for one qualifying child or $2,100 for more than one child, depending on your adjusted gross income.


Adopted a Child

The Credit for Qualified Adoption Expenses, or the Adoption Credit, is a nonrefundable credit based on the amount of qualified adoption expenses you paid to adopt a child. Each dollar spent on adoption, up to $13,570, is included in the credit. If you claim a special needs child, you may claim the full credit regardless of your expenses. This credit is available for each child you adopt as long as the child is not your spouse's child or a child from a surrogate mother. The credit is nonrefundable so you can only zero out your income tax liability with it. Any remaining credit may be carried over for up to five years.