Kids are expensive. A typical middle-class family spends nearly $250,000 to raise a child to the age of 18. While Uncle Sam can’t foot the bill for you, the Child Tax Credit can lessen the sting.
As long as your income isn’t too high, a new baby can earn you a $1,000 tax credit every year until the child turns 17. Eligibility begins the year the child is born.
There’s no limit to how many dependent kids you may claim, as long as they qualify. The credit begins to phase out as income tops $110,000 on joint returns and $75,000 on single and head-of-household returns.
A credit reduces your tax bill dollar for dollar. And for some lower-income taxpayers, the child credit is “refundable,” meaning the IRS will refund the difference if the credit is worth more than your remaining tax liability.