There are several tax credits available exclusively to parents and guardians to help ease some of the costs of raising children.
“Credits are very valuable since they are a dollar-for-dollar reduction of the taxes you owe versus deductions that lower your taxable income.” said Lisa Greene-Lewis, tax expert and spokesperson with TurboTax.
If you’re a parent, don’t forget to check if you qualify for these tax credits.
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Child Tax Credit
“The Child Tax Credit (CTC) was increased under the Working Families Tax Cut and increased from $2,000 to $2,200 and is available for each of your dependent kids under 17,” Greene-Lewis explained.
And for parents who do not owe any tax, Cassandra Kirby, certified financial planner (CFP), enrolled agent (EA), partner, chief operating officer (COO), chief compliance officer (CCO) and private wealth advisor at Braun-Bostich & Associates, said it’s also partially refundable up to $1,700 per child and the amount phases out for married filing jointly at $400,000 and for other filers at $200,000 in 2026.
“There are some other requirements to keep in mind when claiming this credit, so talk to your tax preparer,” Kirby added.
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Child and Dependent Care Tax Credit
Working or looking for work while paying for child care for children under the age of 13?
According to Gene Bott, certified public accountant (CPA), tax advisor and partner at Tax Hive, this is one of the most overlooked tax credits.
“The credit for dependents benefits families where both parents need to work, but it requires gathering information about the care provider,” Bott said. “For this reason, many parents don’t realize it can save them several hundred dollars and don’t claim it.”
Parents who qualify may claim up to $3,000 for one child or $6,000 for two or more children.
“The amount you can claim is a percentage of the total qualifying childcare expenses, up to 50% and is based on your income,” Kirby explained. “The amount you can claim is a percentage of the total qualifying childcare expenses, up to 50% and is based on your income.”
Earned Income Tax Credit
“The Earned Income Tax Credit (EITC) is a substantial credit up to $8,046 for a family with three kids, but the IRS reports every year that one out of five people miss this credit,” Greene-Lewis explained. “You don’t have to have kids in order to get the credit, but the credit increases based on how many kids you have.”
The EITC is available to most low- to moderate-income-earning parents. “There are other requirements to be mindful of in claiming the EITC. Be sure to speak with your tax preparer,” Kirby added.
Education Credits
Parents can take advantage of several education credits, including the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC).
“The AOTC is for parents with children in college. This credit can provide up to $2,500 for tuition and other related expenses during the first four years of college,” Kirby explained. “The Lifetime Learning Credit is for eligible students and you can claim up to 20% of the first $10,000 in eligible expenses.”
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This article originally appeared on GOBankingRates.com: I’m a CPA: 4 Tax Credits Parents Often Overlook
