Having children can certainly help when it comes to tax refunds. Since the expenses of having and raising a child can be costly, including diapers, food and formula, clothing, and more, the government provides additional tax credits to parents. Generally, the largest benefits come after having the first child, but additional children continue to add credits to tax refunds, giving these parents a larger break come April. Depending on the tax bracket that individuals fit into, many can qualify for a $1,000 tax credit per child. According to the IRS in 2009, if income for a single person is less than $35,463, or for married people earning less than $40,463, a credit of up to $3,043 is given for one child. In addition, parents who work can also receive a credit of $600 to $1,050 for each child receiving care.
After the child is born, the IRS requires that the W-4 status be changed with the employer. In doing so, parents can start to notice an increase in the amount that is taken home, sometimes as much as $150 extra every month. Another way that single parents can receive higher refunds each year is to change the tax status to head of household after the birth, which will result in higher deductions. Contributing money each month to a Section 529 State Education Savings Account for children can also help to reduce the amount taken out in taxes from each paycheck. Any child that is claimed on the taxes must have been during the prior tax year. According to tax news, parents are required to note the social security number for all children claimed on the tax return, which can be applied for apply for at the same time a birth certificate is obtained at the hospital. Children can definitely help to boost the amount received from a tax return, and many parents don’t even know the benefits that will come to them when taxes are filed.