Credits for children

Parents and guardians who meet the income requirements may be able to take certain credits to offset the cost of raising and caring for their children or adults in the family who are unable to care for themselves. There’s also a credit for adopting a child, which becomes even more generous if you adopt a special needs child. But, in each case, there are specific rules that govern eligibility for the credit.

• Child tax credit lets you take up to $1,000 off your tax liability for each qualifying child on top of the exemption you can claim for that child. If your child tax credit is more than what you owe, you may also qualify for an additional child tax credit by filing IRS Form 8812. The IRS provides additional information on this topic in Publication 972, Child Tax Credit. The child tax credit may be reduced if your MAGI is above the amount that corresponds to your filing status.
• Child and dependent care credit lets you subtract up to 35% of the amount you pay someone to take care of a dependent child younger than 13 or an older dependent with special needs who can’t take care of himself or herself. But you must qualify by meeting a number of specific requirements, including having earned income and either be working or looking for work. 
• Adoption credit lets you claim qualifying expenses you pay to adopt an eligible child. Those expenses include court costs, attorney fees, travel expenses and re-adoption costs of adopting a child from another country. (If you adopt children from another country, you adopt them in their home country and then must readopt them in the United States.) But you can’t deduct any expenses that were reimbursed by your employer or other entity. This credit is reduced for certain levels of MAGI.

Click here for a summary of these deductions.