2023 tax season guide to claiming your first child as a dependent

If you recently had or adopted your first child, chances are taxes aren't top of mind. But even if you're sleep deprived and haven't left your home in months, you still have to do your taxes.

Of course with a new child, your tax return will be a bit more complicated than just a return for yourself or a joint filing with a spouse. The flip side is that you could qualify for a slew of new tax credits and deductions depending on your income level.

While tax season only just kicked off, it's a good idea to gather as much information as possible now so you're not scrambling as the April 18 deadline creeps up, tax professionals told USA TODAY.

Here's what else new parents need to know this tax season:

Get a Social Security card for your child

The first order of business is to make sure your child has a Social Security number, said John Karls, a CPA and the director of the High-Net-Worth and Family Office Practices at Armanino, a national tax advisory firm. "You can't claim your child as a dependent on your tax return if they don't have a Social Security number."

If you don't already have one for your child, you should apply immediately. But since it could take a while for the Social Security Administration to verify your child's birth certificate and identity, Karls recommends filing for a tax extension as soon as possible.

If you still don't have a Social Security number by October 16, the tax extension deadline, you could always file a return without claiming your child as a dependent and file an amended return once you receive it. But the process could be quite laborious, says Karls.

Head of household status

If you're a single parent, for tax purposes you're considered the head of the household. This means you'll be able to claim a $19,400 standard deduction versus a $12,950 standard deduction for single filers without dependents.

There are also separate, more favorable tax brackets for heads of households.

Tax brackets explainer:What are the 2022 US federal tax brackets? What are the new 2023 tax brackets? Answers here

Importantly, the Internal Revenue Service won't automatically recognize that you're a single parent and thereby qualify for head-of-household status. You'll have to manually check a box yourself or inform your tax preparer.

If you're married and cover more than half of your child's expenses, you would also be considered a head of household but only if you file separately from your spouse.

How much do you get back in taxes for a child in 2022?

Generally, people think having a child will automatically lower their tax bill or trigger a larger refund. But in many cases, it depends on your income level. Lower-income taxpayers are generally eligible for more generous tax credits and deductions after having or adopting a child, said Jim Daniels, a CPA and managing director at UHY Advisors, a tax and consulting services firm.

Adoption tax credit

If you adopted a child in 2022, you may be able to qualify for a credit of up to $14,890 in adoption-related expenses you incurred per child. This could include adoption-related attorney fees, adoption fees, traveling expenses and more.

To claim the full credit, your modified adjusted gross income, which is generally close to your adjusted gross income, must be below $223,410. After that, the credit phases out and is not available for people who had a modified gross adjusted income of $263,410.

The credit is not refundable, meaning if you don't owe any taxes, you won't be able to claim the credit. However, you can carry it forward up to five years to reduce your tax liability in the future.

Child Tax Credit for 2022

If you became a parent in 2022, you could qualify for the Child Tax Credit if you have an adjusted gross income of less than $200,000 or less than $400,000 if you're filing a joint return with a spouse.

The maximum tax credit per qualifying child you could receive for a child born last year went down to $2,000 from $3,600 for children five and under -- or $3,000 for children six through 17 years old. Additionally, you can't receive a portion of the credit in advance, as was the case last year.

Tax credit for childcare expenses

If you are employed and pay for childcare services, you may qualify for what's known as the dependent care tax credit.

If your adjusted gross income totaled $43,000 or less last year, you could get a tax credit for up to $3,000 you spent on childcare.

In some cases, you may receive tax documentation from your child's care service, said Karls. But if not, you should gather as much information as possible to show you paid for childcare.

"You can usually recreate the expense anyway if you paid using a credit card or a check," said Daniels. Typically you won't need to produce a really detailed level of documentation to claim the credit unless your return is audited, said Timothy Speiss, tax partner in the Personal Wealth Advisors Group at EisnerAmper LLP.

But it's still a good idea to get in the habit of saving receipts even for expenses you may not think are tax deductible, he said.

Earned income credit

Having a child could make you eligible for the Earned Income Tax Credit. If you have one child and your adjusted gross income was $43,492 if you're filing a return alone, or $49,622 if you're filing a joint return with a spouse, you could claim up to $3,733 in a refundable tax credit. This means that even if you don't owe any taxes for 2022, you could receive $3,733.

Make adjustments to your W-4 withholding

Finally, if you haven't already, you should make sure to fill out a new W-4 form if you work for an employer to reflect that you now have a dependent. This will likely lower the refund you get next year but it'll increase the size of your paychecks going forward since less money will be withheld, Daniels said.

Elisabeth Buchwald is a personal finance and markets correspondent for USA TODAY. You can follow her on Twitter @BuchElisabeth and sign up for our Daily Money newsletter here

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2023 tax season guide to claiming your first child as a dependent

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