Kids bring joy, chaos... and tax benefits. What to know as a new parent filing a return
If you welcomed a new baby, adopted a child, or became a stepparent in 2024, your tax return should look different this year.
While you may be busy adjusting to life with your new family member, don’t forget to file your tax return before the federal April 15 deadline. Experts advise taxpayers to file sooner rather than later to avoid mistakes. If new parents set aside time to research deductions and credits they may now qualify for, they can save hundreds if not thousands of dollars.
“One of the biggest life changes is new dependents,” said Mark Steber, senior vice president and chief tax officer at Jackson Hewitt. “New parents in particular have a whole host of new considerations.”
Between diaper changes, meal prepping, and doctors' visits, you’ve got your hands full. Here are some things to avoid getting lost in the shuffle:
Your dependent's proof of birth
Make sure to keep track of your new dependent’s social security number, adoption tax identification number or individual tax identification number.
Confirming your child’s birth is the only way the IRS can verify you are eligible to claim parental tax breaks.
Once you have it, make sure it is entered correctly on your tax forms. Mistyping social security numbers is one of the simplest, yet most significant mistakes people make on their returns, according to TurboTax CPA and tax expert Lisa Greene-Lewis.
Your filing status
There’s a chance that a new dependent may bring a new tax filing status.
If you were previously married filing jointly and had a child join your family in 2024, it will likely remain the same, but you and your spouse might expect more credits and deductions to be available to you.
If you are legally single, experts advise you to change your filing status to head of household to maximize your benefits if you are eligible.
Everyone’s circumstances are different. If you’re unsure of the best filing status for you, the IRS has a five-minute online survey to help you decide.
Credits and deductions
Kids bring many things to parents’ lives, including love, chaos, and a whole new perspective, but tax experts agree they also bring something else important.
“Kids are worth valuable deductions,” Greene-Lewis said.
In addition to higher thresholds for the standard deduction and the Earned Income Tax Credit, here are some credits you shouldn’t miss out on, according to the IRS:
◾The Child Tax Credit: Taxpayers can claim up to $2,000 for each qualifying dependent child when filing their return this year so long as they meet all eligibility factors and have an annual income under $200,000 or under $400,000 if filing a joint return.
◾Child and Dependent Care Credit: If taxpayers paid for child care or day care expenses, they may qualify for this credit and claim up to 35% of those expenses so long as they are eligible.
◾Adoption Tax Credit: Taxpayers may claim eligible adoption expenses for each eligible child if they went through the adoption process during 2024. It applies to international, domestic, private, and public foster care adoptions.
Adjustments to your withholding
After you file your return, make sure to fill out a new W-4 form with your employer reflecting that you now have a dependent. The change will likely lower your withholding and decrease your tax refund in 2026 but will increase the size of your paychecks going forward.
Reach Rachel Barber at rbarber@usatoday.com and follow her on X @rachelbarber_