Claiming a newborn on your taxes
First of all: if you recently had a baby, congratulations! You’re in for a lot of changes, and those include changes to the way you file your taxes. Let’s talk about the primary differences you’ll need to be aware of when you file your taxes as a parent for the first time.
First time filing taxes with a child: Dependency requirements
In order to claim a new child as a dependent, your child will have to meet dependency requirements.
Your first step needs to be applying for your baby’s Social Security Number. You will need this number before doing anything else.
To get the number, visit or contact the Social Security Administration to fill out Form SS5, the Application for a Social Security Card. Once you have applied, it will typically take about two weeks for the number to arrive.
Another requirement is your child must have lived with you for more than half of the year. A dependent child born during the year is treated as having lived with you for more than half of the year if your home was the child’s residence for more than half of the time he or she was alive during the year.
Time the child spent in a hospital after birth won’t count against you.
Possible change in filing status
If you are single, had a baby, and now support that child, your filing status could change to Head of Household (HH).
The HH filing status gives you a larger standard deduction and more favorable tax brackets. That means – thanks to your new bundle of joy – you could be paying less federal tax as HH than you would as single for the same dollar amount of income.
If you are married, having a child will not generally affect your filing status.
Claiming the Child Tax Credit
Sometimes parents with newborn will ask, “how much can you get back on taxes per child?”
One of the best-known tax breaks for parents is the Child Tax Credit. A taxpayer with a new baby may claim the child tax credit, which lowers their tax bill by up to $2,000 per qualifying child if the taxpayer’s income is not too high. In some cases, the credit may even exceed your taxes, allowing you to get extra money back as a refund. Everyone knows children can be expensive and paying less in taxes means better diapers or nicer toys for your little one.
Claiming tax breaks for child care and medical expenses
If you paid someone to care for your child while you worked – like a daycare center – you may be able to claim the Child and Dependent Care Credit on your federal income tax return. It’s based on your amount of earned income and can be up to 35% of your qualifying child care expenses, up to a max expense of $3,000 for one child, and up to a max expense of $6,000 for two or more children.
The Child and Dependent Care Credit may be reduced if you receive tax-free dependent care benefits from your employer.
Medical expenses can be deductible if they exceed 7.5% of your adjusted gross income. The out-of-pocket cost of the hospital stay to birth your baby and related care counts as medical expenses, but mothers are surprised to find out that the cost of breast pumps and lactation supplies are medical expenses as well. These expenses may help you get over that 7.5% hump. To qualify for this deduction, you will need to itemize deductions instead of claiming the standard deduction.
Working taxpayers with a child can claim a credit for qualified child care expenses.
Other tax breaks for parents
Additional tax breaks can be claimed if the following apply:
- You qualify for the Earned Income Tax Credit.
- Gifts (in money or property) from friends, grandparents and other relatives are income tax free to you and your child.
- You participate in a qualified tuition program (QTP, also called “a 529 plan”) offered by your state. QTPs allow you to set aside money for your child’s future secondary and higher education expenses. While there is no immediate federal tax break, earnings in the account grow tax free, distributions used for education costs are tax-free, and you may get a state deduction or credit for your contributions.
Are you filing as a first-time parent?
The experts at H&R Block can look at your personal situation and help make sure you don’t miss any tax breaks you qualify for as a new parent. And if you’d rather file your taxes yourself, know you are still backed by our 100% accuracy and maximum refund guarantees. In an office or online, don’t just get your taxes done. Get your taxes won with H&R Block.
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