New Baby? Here’s What to Know for Your Next Tax Return
Welcoming a new baby is life-changing—and it can also bring some big tax benefits! From tax credits to dependent deductions, your little one could help lower your tax bill and increase your refund. Here’s what new parents need to know when filing their next tax return.
1. Get a Social Security Number for Your Baby 🆔
Before you can claim your child on your tax return, they must have a Social Security number (SSN). You can apply for one at the hospital when you register your baby’s birth, or later through the Social Security Administration.
✅ No SSN = No tax benefits.
2. Claim Your Child as a Dependent 👨👩👧
Your newborn can be claimed as a qualifying child dependent on your tax return, as long as:
They lived with you for more than half the year (yep—being born counts!),
You provided more than half of their financial support,
And they didn’t file a joint return with someone else (which won’t happen for babies!).
3. You May Qualify for the Child Tax Credit 💰
In 2024, you can claim up to $2,000 per child under age 17 through the Child Tax Credit. For babies born any time in the year, you’re eligible for the full amount.
💡 If your income is below a certain level, part of this credit is refundable—meaning it could increase your refund even if you don’t owe taxes.
4. Earned Income Tax Credit (EITC) May Increase 📈
Having a baby may make you newly eligible for the Earned Income Tax Credit, a benefit for low-to-moderate income earners. The credit amount increases with the number of children you claim—and could be worth thousands depending on your income.
5. Child and Dependent Care Credit 🧑🍼
If you pay for daycare, babysitters, or after-school care so you can work or look for work, you may qualify for the Child and Dependent Care Credit.
You can claim up to 35% of $3,000 in care expenses for one child—so keep receipts from your childcare provider!
6. Start (or Use) a Dependent Care FSA if Offered 💼
If your employer offers a Dependent Care Flexible Spending Account (FSA), you can contribute pre-tax dollars to pay for childcare. This can save you hundreds of dollars in taxes.
7. Update Your W-4 at Work ✍️
Having a baby changes your household size, which can affect how much tax is withheld from your paycheck. Update your W-4 form with your employer to avoid overpaying or underpaying taxes throughout the year.
Final Thoughts 🌟
Your new baby brings lots of love—and a few valuable tax breaks, too. Be sure to:
✅ Get a Social Security number
✅ Claim them as a dependent
✅ Explore credits like the Child Tax Credit, EITC, and Childcare Credit
With a little prep, your growing family could see a bigger refund come tax season!
