Tax Exemptions and Deductions for Children

Deductions and Expenses for children

Any child that you have that you claim on your tax return you’re going to get a personal exemption for it in 2017. The personal exemption is $4,050 and will directly reduce the taxable income of the taxpayer claiming the child.  There is also a child care credit for 2017.  There are factors to determine if a child will qualify for the credit.

  1. Age – the child must be under age 17 (16 years old and younger) at the end of the year.
  2. The child must be your own child, stepchild, or a foster child placed under your custody by a court. Adopted children are always considered your own children.
  3. The child cannot have provided more than one half of their own support during the year.
  4. You must clain the child as a dependent on your tax return for the year in which you are claiming the child tax credit.
  5. Children claimed for the child tax credit must be a U.S. citizens, U.S. National, or U.S. resident alien.
  6. The child must have lived with you for more than one half of the year. Children that were born during the year are deemed to have been living with you the entire year.  (There are some exceptions to this residency test under certain circumstances.)
  7. Phase out thresholds start applying when MAGI (Modified Adjusted Gross Income) reaches the following income levels:
    1. $75,000 for Single and Head of Household
    2. $110,000 for Married Filing Jointly
    3. $55,000 for Married Filing Separate

For every $1,000 income above the threshold, the available child tax credit is reduced by $50.  For 2017, the child tax credit is nonrefundable.  So, of the credit exceeds your tax liability, your tax bill would be reduced to zero.

Maximum Childcare Credit

For those that qualify for it, for one child, the maximum credit that you could get would be $2,100. That’s provided there have been at least $6,000 in qualified expenses.