- Rethinking Your Benefit Elections
- Disability and Life Insurance
- To Work or Not to Work
- Looking At Day Care
- Employing a Nanny
- Tax Advantages Associated with Children and Families
- Children's Taxes, Tax Returns, and the Kiddie Tax
- College Funding–There's No Time Like the Present
- Estate Planning and Children
- Other Tax Credits
Child Tax Credit
Parents may claim a $1,000 credit against federal income tax for each child under age 17. The credit is phased out starting from $110,000 of adjusted gross income for married joint filers and ($75,000 for single filers).
The child credit is partly refundable; the refundable portion is referred to as the "additional child tax credit." You receive a refundable credit if your Child Tax Credit is greater than the total amount of income taxes you owe, as long as you had an earned income of at least $3,000.
Earned Income Tax Credit
A credit is available to certain low-income taxpayers who have earned income. The maximum credit in 2015 is up to $503 ($496 in 2014) for a taxpayer with no children and who has earned income less than $14,820 ($14,590 in 2014), and $3,359 ($3,305 in 2014) for a taxpayer with one child and earned income less than $39,131 ($38,511 in 2014). For a taxpayer with two children and earned income less than $44,454 ($43,756 in 2014), the maximum 2015 credit is $5,548 (5,460 in 2014). For 3 or more children, higher limits apply.
Child and Dependent Care Tax Credit
A credit is allowed for a portion of qualified child or dependant care expenses that are paid in order for the taxpayer to work. The maximum amount of child care expenses that can be considered is $3,000 for one child or dependant, or $6,000 for two or more. The credit is 35% of eligible child care expenses with income of less than $15,000, gradually reduced to 20% of qualifying expenses for income exceeding $43,000.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.
Securities, insurance products and advisory services offered through Cetera Investment Services LLC (doing insurance business in CA as CFGIS Insurance Agency), member FINRA/SIPC. Cetera is under separate ownership from any other named entity.