The child tax credit is a perk that you can add to your taxes when you file in April. The idea of this credit is that it is the government’s way of doing its part to help make raising your kids easier by giving you a break at the end of the year. As of the writing of this article, qualifying Americans are still able to take advantage of the tax credit for all qualifying children. Today, we will talk a bit more about his great perk and how to add a newborn to the child tax credit.
The Ins and Outs of the Child Tax Credit
Before we discuss how to add a newborn to the child tax credit, we would like to provide a brief summary of what you need to qualify for the credit and how much you can put on your taxes.
Currently, when you file in 2023 (for your 2022 taxes), you can add your child to the section that allows you to get a tax credit. According to the White House, the tax credit is still available as of this year. However, keep in mind that every year is different. As laws change, this credit may be modified or may not be available at all.
At this moment, the child credit is at $2,000 for each child in your home that is 16 years of age or younger. Depending on the rules of the time, there may be a maximum per household of $6,000. In order to qualify, your household must meet the following requirements:
- A family that files taxes jointly and has two incomes must make $400,000 or less to qualify.
- A family with a single-parent income must make less than $200,000.
- At a minimum, the family must have made at least $2,500 in the year.
- The parent(s) must have a valid social security or taxpayer identification number.
- Your child must be born into your family, be adopted, or be a foster child put in your care by a government agency.
- A child must be 16 years old or younger.
- The child must have a valid SSN.
- The child must live with you and must have lived with you for at least six months.
The Steps to Add a Newborn to the Child Tax Credit
While it is not an especially complicated process, you will need to add your newborn to the child tax credit. If you have any questions at all, then consider contacting an accountant or tax professional.
You will add your newborn to the Schedule 8812, which is exclusively designed for the child tax credit. You might also use this form to document if you received any excess child tax credit in the previous year. You can find this along with the Form 1040.
In addition to this form, you will need to show proof of eligibility. To do so, you can provide the newborn’s birth certificate, proof of health insurance for your newborn, your newborn’s childcare records, and your newborn’s social security card. You can find a more comprehensive list of qualifying documents on the form 14815.
Remember that you can add a newborn to the child tax credit as long as they were born during the previous year. So, it even counts for those December babies.
If You Received Advance Payments
Some families in the U.S. may have received an early payment as part of the tax credit, and if you did receive advanced funds, then you must inform the IRS when you complete your 2023 taxes.
Keep in mind that the money you received does not count as income. For that reason, if you received more money than what your tax-related circumstances dictate, then you may need to pay some of that money back to the government.
While this doesn’t apply to newborns, if something changes during the year, like your kid turns 17 halfway through, then you may not be eligible for the full benefit, so you may need to pay something back.
Again, if it is better to be in compliance, then to have issues later on. So, speak to a tax expert if you have questions.
Other Tips for Parents Filing Taxes
If you are a parent that is filing taxes in 2023, then there are a few other tips that you should consider when submitting your paperwork in April.
Parents who adopted a child in 2022 can file for their own tax credit to offset the costs of adoption. Currently, the credit can be as much as $14,890. Keep in mind that your income must be below $260,000 to qualify.
Higher Education Tax Credit
If you have an older child that is attending college, then you may be able to add that to your taxes. There are two programs that might apply: The American Opportunity Tax Credit and the Lifetime Learning Credit. Talk to your tax professional about these opportunities. This credit could help to pay for tuition, enrollment fees, and school materials.
Student Loan Interest Deduction
Parents may also be able to deduct interest payments on particular student loans. By doing so, you will reduce the amount of your taxable income, which means that you will owe fewer taxes. In order to apply, your child must have been enrolled on at least a half-time basis when the loans originated.
That concludes our lesson on the 2023 tax credit and how to add a newborn to the child tax credit. Remember again that the rules can change every year, so it is important to talk to a tax professional if you have any doubts about how you are filing your taxes. In the meantime, enjoy this perk of parenthood while it lasts because it likely won’t go on forever.
- How Long Does it Take to Adopt a Child?
- Child Development Articles For Big Kids
- How Do I Get A Replacement Social Security Card For My Child, In 3 Steps