6 Tax Benefits for New Parents
Written by
Ashley Donohoe
Edited by
Amber Barkley
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While adding to your family is an exciting time, a new child also creates some costs you’ll want to offset whenever possible. One money-saving move involves revisiting your tax situation. If you adopted or had your kid in 2024, you might qualify for perks, such as several tax credits, a boosted standard deduction and access to tax-advantaged accounts.
As you file your 2024 tax return and plan for this tax year, check out these six tax benefits for new parents — and make sure you take advantage of all the tax breaks available to families, new or not.
Head of Household Filing Status
If you were a single parent or otherwise considered unmarried at the end of 2024, your new child might help you qualify for a standard deduction of $21,900 with the head of household status. That’s $7,300 more than the $14,600 standard deduction you’d get as a single tax filer.
Some requirements are that your child lived with you for either over half of the tax year or half the time since their birth and that you paid for over half of the household expenses. You also can’t be another taxpayer’s dependent. Try the IRS filing status tool to see if you’re eligible.
Child Tax Credit
The child tax credit might cut your tax liability by up to $2,000 for each of your qualifying children under 17 who meet the dependent requirements. If the credit ends up being more than the taxes owed, you could get up to a $1,700 refund.
To get the whole credit for your kid, your modified adjusted gross income, or MAGI, can’t be over $400,000 if you’re a married joint filer or $200,000 if you use another status. A partial child tax credit amount is available if your MAGI is up to $440,000 for joint filers or $240,000 for other statuses.
Child and Dependent Care Credit
Whether you sent your child to daycare or hired an in-home babysitter so you could work your job or find one, you might get some tax relief with the child and dependent care credit. It’s worth up to $1,050 for one child or $2,100 total for multiple children.
The IRS instructions note that this nonrefundable credit is determined based on your AGI and can total 20% to 35% of the year’s care costs. Certain costs, like K-12 school tuition and transportation, don’t count. Also, unless your child has a disability, they must be younger than 13 years old for you to get the credit.
Earned Income Tax Credit
While the earned income tax credit (EITC) doesn’t always require having a child, an eligible dependent increases the IRS income limits and your chance of qualifying. For example, if you file as single, the 2024 AGI limit is $18,591 without a child versus $49,084 with one.
Your EITC amount as a parent can range from $4,213 to $7,830, with your filing status, number of children and AGI impacting how much you get. There are also various rules related to your earned and investment income, and you or your spouse must be 25 to 64 years old. The IRS EITC Assistant can show you if you’re eligible.
Adoption Credit
You may qualify for a nonrefundable credit of up to $16,810 for adoption costs you paid for each child in 2024. The IRS lists various eligible expenses — including adoption, home study, legal and travel fees — but anything an employer or government program reimburses won’t count.
Rules for getting this credit depend on whether you did a domestic, international or special needs adoption, so consider discussing your family’s situation with a tax professional. There’s also a 2024 MAGI limit of $252,150 for the full adoption credit and $292,150 for a partial credit.
Tax-Advantaged Savings Accounts
While they likely won’t affect your 2024 tax bill, special savings accounts can help you prepare for future costs related to your kid and enjoy some tax advantages.
For example, you might have access to a dependent care flexible spending account at work to put aside before-tax funds for child care expenses. Coverdell education savings accounts and 529 plans require after-tax dollars, but they let the money saved for your child’s education grow without taxes due and allow tax-free withdrawals for eligible expenses.
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