Families With Children

Child Tax Credit

Maximum Credit

The maximum credit is $2,000 per qualifying child.

Maximum Refundable Credit

The maximum refundable credit (Additional Child Tax Credit) is $1,600 per qualifying child.

Adjusted Gross Income (AGI) Phaseout

The $2,000 credit is reduced by $50 for each $1,000 of modified AGI above:

• $400,000 Married Filing Jointly
• $200,000 Single, Head of Household, Qualifying Widow(er), or Married Filing Separately.

Credit for Other Dependents

Maximum credit: $500 per qualifying dependent.

A nonrefundable credit of up to $500 is allowed for dependents other than a qualifying child for the Child Tax Credit.

Child and Dependent Care Credit

Credit

The credit is 20 to 35% of the smallest of:

• $3,000 ($6,000 for two or more qualifying persons).
• Qualified expenses incurred and paid during the year.
• Include expenses for care in 2023 that were paid before 2023. Reduce expenses by dependent care benefits excluded from income.
• Your earned income.
• Your spouse’s earned income.

Exclusion

Instead of taking the credit, you may be eligible to exclude from income an amount up to $5,000 for dependent care benefits received under an employer plan.

Earned Income Credit (EIC)

The EIC is a refundable credit for low-income earners.

Requirements for Everyone

The following requirements must be met whether or not you have qualifying children.

• Valid Social Security Numbers. You and your spouse (if filing jointly) must have valid Social Security Numbers. Qualifying children must also have valid Social Security Numbers except a child who was born and died during the year. Adoption and individual taxpayer identification numbers (ATINs and ITINs) do not qualify. A Social Security Number on a card that reads “Not Valid for Employment” does not qualify. A Social Security Number on a card that reads “Valid for work only with DHS (or INS) authorization” qualifies.
• You must be a U.S. citizen or resident alien for the entire year. A nonresident alien can claim the credit if married to a U.S. citizen or resident alien, and the nonresident alien chooses to be treated as a resident for the entire tax year by filing a joint return.
• You may not be a qualifying child of another taxpayer.
• You may not file a tax form relating to foreign earned income.
• Your investment income must be $11,000 or less(indexed for inflation).
• You must be at least age 25 but under age 65 at the end of the year. If you are married filing a joint return, either you or your spouse must be at least age 25 but under age 65. It does not matter which spouse meets the age requirement, as long as one does.

Married Filing Separately

You may claim the EIC if you are married, not filing a joint return, had a qualifying child who lived with you for more than half of the year, and either of the following applies.

• You lived apart from your spouse for the last six months of the year, or
• You are legally separated (according to state law) under a written separation agreement or a decree of separate maintenance, and you did not live in the same household as your spouse at the end of the year.

Adoption Credit

Credit and Exclusion Amount

A taxpayer can claim a credit of up to $15,950 (2023) and also exclude up to $15,950 of employer-provided benefits from income for expenses of adopting an eligible child. The same qualifying expenses cannot be used for both. Limits apply to the total spent over all years for each effort to adopt an eligible child. An attempt that leads to adoption and any unsuccessful attempt to adopt a different child is treated as one effort. Unmarried persons who adopt a child can divide each limit in any way they agree.

Eligible Child

A child under age 18 or a person who is physically or mentally unable to care for themselves.

Education Credits

American Opportunity Credit. Credit of up to $2,500 per student for the first four years. 40% of the credit may be refundable.

Lifetime Learning Credit. Credit of 20% of the first $10,000 of qualified education expenses (maximum credit is $2,000).No limit on the number of years the credit may be claimed.

Phaseout. Both education credits phase out with income $80,000 – $90,000 ($160,000 – $180,000 MFJ).