So, 2019 was kind of major: It’s the year you brought new life into the world. But now, with the tax deadline in the near future (not to mention some tax changes), you still have a gazillion questions about the newborn-related write-offs you can take before you file. We checked in with Lisa Greene-Lewis, TurboTax expert and CPA, to find out the top four things you need to know if you had a baby in 2019.
4 Things to Know About Your Taxes If You Had a Baby Last Year
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Published Jan 17, 2020
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You Can Officially File For The Child Tax Credit
Your new baby qualifies as a dependent. But as of last year, you can no longer claim the dependent exemption (to the tune of $4,050 per head). Instead, you can file for the child tax credit, which has doubled (it’s now $2,000 versus $1,000).
Think of the tax credit as a dollar-for-dollar reduction of taxes. Still, it’s worth noting that in order to claim it in full, you need to make less than $400,000 if you file jointly.
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You Can Still Claim The Earned Income Tax Credit
For background, the Earned Income Tax Credit (EITC) is a huge benefit to taxpayers with low to moderate income.
Qualification depends on a few things: The child has to live with you for more than half the year, he or she can’t be claimed by any other taxpayer—although exceptions apply for divorced or separated parents—and the household income must be less than $46,884 if you’re married and filing jointly with one kid. (Tax credit and income levels increase the more kids you have.) If you have one child, the maximum amount you can get back is $3,526. If you have two kids, it’s $5,828. And for three or more kids, the credit tops out at $6,557. (More details about the Earned Income Tax Credit and how to claim it can be found here.)
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You Can Write Off A Portion Of Your Childcare
If you’re working (or actively seeking work) and you pay for childcare for a dependent under 13, you can claim the Child and Dependent Care Credit, which is a dollar-for-dollar reduction of your taxes, based on your childcare expenses. You can get up to $1,050 for one child and up to $2,100 for two children or more. (Nursery school, private kindergarten, after-school programs, summer day camps and day care are all qualifying expenses.) Already pay for childcare out of a pretax FSA? You can’t double dip, but you can claim the credit on up to $1,000 if you have two or more kids, assuming you’ve maxed out the $5,000 FSA contribution.
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And The Cost Of Any Onesies You Donate
News flash: Babies outgrow their clothes fast. Pass the ones in good condition on to a charity that accepts clothing donations and bump up the charitable deduction on your taxes.
