Parents who are being slammed with child care or tuition costs, extracurricular fees, medical bills, and constant food and clothing expenses for growing kids — not to mention all of the other surprises that are thrown at your budget every year — can at least get some relief when it comes to tax time. There are a number of tax credits and deductions that might apply to you if you’ve got at least one child, potentially lowering your taxes owed or netting you a bigger refund.
Child Tax Credit
This one’s pretty straightforward. If you have a dependent child (including a foster child, stepchild, nephew, niece, or grandchild) under 17 living in your house for at least half the year, you’ll likely qualify for this credit, which gives you a $2,000 credit for each qualifying child.
Child and Dependent Care Tax Credit
This credit gives you 20 to 35 percent back of up to $3,000 of daycare, babysitter, and other child care costs for kids under 13, or the same percentage of up to $6,000 if you have two or more kids who require child care so that you can work or look for a job. The same goes for any dependent adults in your household whom you need to pay for caregivers for.
What many people don’t realize is that this credit can be used for things beyond daycare and other kinds of physical care. Household expenses, like paying someone to clean or cook, can qualify as well, as long as the people providing those services aren’t your spouse, a dependent you’ve listed on your return, or one of your own kids under age 18 (whether you claim them as a dependent or not).
Earned Income Tax Credit
If your family’s income is under a certain amount, you could qualify for this credit, depending on how many children you have. For example, for the 2019 tax year (taxes due in April 2020), if you’re a single head of household earning under $46,703 and you have two kids, you could get up to a $5,828 credit. This credit can lower your tax bill, and is refundable — meaning if the credit brings your taxes owed to zero, you can get the remaining balance of the credit in a refund.
Adoption Tax Credit
There are credits available for attorney and court fees, travel expenses, home visits, and other expenses related to the adoption of a child. Even if the adoption has not been finalized yet or the adoption process was never finalized for some reason, you may still qualify.
Higher Education Tax Credits
If you’re paying for a child’s current college tuition or other classes post high school, you may qualify for the American Opportunity credit or the Lifetime Learning credit. These also include the cost of books and other school supplies (but not room and board or transportation). Additional tax deductions may apply if you’re paying back interest on student loans.
Medical Expense Deduction
If your family had significant medical expenses last year (more than 7.5 percent of your adjusted gross income, or AGI; for example, if your AGI was $40,000 and you spent more than $3,000 on medical bills), look into whether you qualify for a medical expense deduction. Remember that besides doctor and hospital visits and prescription drugs, medical expenses can also include nursing homes, addiction and weight-loss programs, glasses and contact lenses, and transportation to medical appointments, among other things.
Depending on where you live, there could be other state tax laws that give you additional credits similar to the ones listed above, and some may have different qualifying rules than the federal credits do.
Keep in mind that even if you don’t expect to owe anything in taxes this year and aren’t legally required to file, you’ll still have to file your federal and state taxes to qualify for these credits. Some of them (like the Earned Income Credit) can translate to a bigger tax refund, if you end up not owing taxes.