Kids are great! But they can be taxing…in more ways than one.
Growing up, my parents would always give me an increase on my allowance around April. They would say it was to teach me how to budget my money. Not to sell out my parents or anything but now I know that they were able to give me a little extra once a year because they were getting more back from the IRS after filing and claiming me as a dependent.
Let’s just say, those little bonuses stopped once I began filing my own taxes.
Is there a limit to how many dependents I can claim on my tax return?
No, there is no maximum amount of dependents you’re allowed to claim on your tax return. You can claim all dependents who are qualified child dependents according to IRS rules. Consider it a token of appreciation for supporting the ever-increasing costs of diapers, astronomical college tuition fees and for simply putting food on the table each night.
What qualifies a child as my dependent?
You may see this question to have a simple answer if you are married parents filing a joint return. However, for single parents, married parents who file separately or other relatives, the answer is not as clear.
A qualifying child dependent has slightly different requirements than a qualifying relative dependent does. In order to be considered a qualifying child dependent, they must meet all of the following requirements:
- The child must be a U.S. citizen, national, resident or a resident of Mexico or Canada.
- The child cannot be claimed by someone else or themselves if they are also taking the personal exemption.
- If the child is filing a tax return, they cannot be claiming a dependent.
- The child cannot be filing a joint tax return.
- The child must be your son, daughter, stepchild, brother, sister, eligible foster child, half sibling, stepsibling, or adopted child. He/she can also qualify if they are an offspring of any of the above.
- The child must have lived with you for more than half of the year.
- The child must be under 19 years old. If the child is a full-time student, they must be under 24 years old. There is no age limit if the child is totally and permanently disabled.
- You must have provided more than half of the child’s annual financial support.
How much is each dependent child worth on my tax return?
Each child claimed as a dependent reduces your taxable income by $4,000. Contrary to popular belief, this does not mean that $4,000 will be added to your refund or directly deducted from your tax bill. It means that the income amount that you are being taxed on is reduced which ultimately reduces your tax bill (or increases your refund amount).
Although claiming a dependent or two on your tax return opens the door to qualifying for the Child Tax Credit, it does not guarantee it.
Can I claim the Child Tax Credit?
Claiming a dependent on your tax return reduces your taxable income while claiming the child tax credit reduces your tax due amount directly. A tax credit reduces your tax bill dollar-for-dollar and each child is worth up to $1,000. To read more about qualifying for the credit, check out our article all about it HERE!
When you create an account with Rapidtax, our application will automatically let you know if you qualify for the Child Tax Credit after entering in your income and dependent information.
Happy filing!
I have 4 kids and myself can I carry all four of them
Hi Renee,
Are you asking if you are able to claim all of your children as qualifying dependents? You can claim all four if you meet the qualifications instated by the IRS:
1. The child must be a U.S. citizen, national, resident or a resident of Mexico or Canada.
2. The child cannot be claimed by someone else or themselves if they are also taking the personal exemption.
3. If the child is filing a tax return, they cannot be claiming a dependent.
4. The child cannot be filing a joint tax return.
5. The child must be your son, daughter, stepchild, brother, sister, eligible foster child, half sibling, step-sibling, or adopted child. He/she can also qualify if they are an offspring of any of the above.
6. The child must have lived with you for more than half of the year.
7. The child must be under 19 years old. If the child is a full-time student, they must be under 24 years old. There is no age limit if the child is totally and permanently disabled.
8. You must have provided more than half of the child’s annual financial support.
Keep in mind that the IRS has a different set of requirements when it comes to claiming the Child Tax Credit or Additional Child Tax Credit.
I have six kids and made I little offer 57k last year. And I able to receive a tax break for all six kids or does it stop at 3 kids?
Hi David,
I suggest taking a look at the qualifications for the Additional Child Tax Credit to see if you can claim it for any of your qualifying dependent children. This is a refundable credit so if the credit exceeds your tax liability, it will be issued to you as a refund from the IRS.
Hi!, I have a question. Might be long winded and a little confusing, so apologies in advance!. My situation is that my husband and I have 3 children of our own. We are in the process of adopting 3 additional children that were placed with us through child protective services. I know we won’t qualify this year as we have already filed our taxes and the adoption is not yet complete, however- I have been told of a tax credit for adoption if you adopt a special needs child through an agency such as CPS.
I just heard of this a few days ago, and I have tried to do some research, but the few things I found on the topic were very vague, and frankly, quite confusing. All 3 of the children we are adopting are special needs and were placed with us by Child welfare services, so from what i gather we qualify based on those terms, but I do not know any other conditions and am feeling quite confused about the entire situation.
The children we are adopting have lived with us for over a year now, so we intended to claim them along with our biological children on this years return. However, when we filed our taxes this year, we asked about claiming the 3 additional children, and were told that since we were already claiming our own 3 children and receiving the child tax credit, it would not increase our refund, so we left them off.
Is that accurate? And have you ever heard of this adoption credit? If so, how does it work?
Thanks!!.
Hi Cassie,
There is an Adoption tax credit and exclusion that you may qualify for. It applies to those children that are under the age of 18 OR physically or mentally incapable of self-care (regardless of age). As stated by the IRS,
Tax benefits for adoption include both a tax credit for qualified adoption expenses paid to adopt an eligible child and an exclusion from income for employer-provided adoption assistance. The credit is nonrefundable, which means it’s limited to your tax liability for the year. However, any credit in excess of your tax liability may be carried forward for up to five years. The maximum amount (dollar limit) for 2016 is $13,460 per child.
Thank you for all the information. However, I am still thoroughly confused… so many people say conflicting things and it’s hard to know who to believe. Any way, here’s my situation. I work full time and my wife stay at home with our 4 kids. I was told to claim 10 on my w4’s, however, after my tax guy reviewed my w2, he suggested claiming 20. I don’t understand his reasoning and after conducting my own research, I can’t find anything to support his suggestion. I would appreciate any input.
Hi Cain,
Claiming 20 allowances would most likely have no income at all withheld to cover taxes owed to the IRS. Your tax preparer was probably suggesting this so that you would have the maximum amount of take-home pay throughout the year. This also means that you would owe the IRS a pretty large tax due amount after filing for the year. The amount of tax you owe for the year remains consistent. The W-4 only determines when you will pay. The more allowances you claim, the less is withheld from your paychecks throughout the year. If too little is withheld, you will have a tax bill after filing. The less allowances you claim, the more is withheld from your paychecks throughout the year. If too much is withheld, you will be issued a refund from the IRS. Claiming 10 allowances is more reasonable than 20 but is still likely to result in a tax due. I’d suggest referring to the Personal Allowances Worksheet on the first page of the W-4 form.
Can I claim my boyfriend on my tax return? He didnt work all year. We live together and have three children. Would I also get a tax credit for him?
Hi Iris,
You can claim your boyfriend as a dependent IF he meets all of the qualifications set forth by the IRS for a qualifying relative.
He must meet all of the following requirements in order to be considered your Qualifying Relative:
1. Not a Qualifying Child: The individual cannot be your Qualifying Child and cannot be someone else’s Qualifying Child. They are a Qualifying Child if they meet all the requirements, whether or not they are claimed as a dependent.
2. Relationship: The person must either have lived with you for the entire year as a member of the household (a person who is not actually related to you may meet the requirements in this way), or be related to you in one of the following ways: your child, stepchild, grandchild or other descendant of one of your children (or stepchildren or foster children), son-in-law, daughter-in-law, brother, sister, half brother, half sister, stepbrother, stepsister, brother-in-law, sister-in-law, parent, stepfather, stepmother, father-in-law, mother-in-law, grandparent, and, if related by blood, aunt, uncle, niece, or nephew. Remember that a child whom you legally adopted is always considered to be your child. Also note that, for the purposes of this requirement, divorce or death does not change any relationship which was established by marriage (e.g. son-in-law, daughter-in-law, etc.)
3. Gross Income: The person must have made less than $4,000 in gross income during 2016.
4. Support: You must have provided more than half of the individual’s total support during the year.