Additional credits could net parents thousands more
ATLANTA, GA – It may be the first baby of the year who grabs the media headlines but according to H&R Block, it’s the last baby of the year who yields the tax savings. Babies born before the stroke of midnight New Year’s Eve could save their parents thousands on their 2009 returns.
“Mere minutes can mean major tax savings this New Year’s Eve,” said Corey Sutton, district manager of H&R Block. “Babies born on Dec. 31 provide parents with a $3,650 tax exemption for all of 2009. To get that same tax break, parents of babies born after midnight on Jan. 1, will have to wait until they file their 2010 taxes – in 2011.”
In addition to the exemption, new parents may qualify for two credits that could reduce their tax liability even more:
Child Tax Credit:
- A credit of up to $1,000 per qualifying child under 17
- All or a portion of the credit may be refundable, which means if the parents don’t have any tax liability, they will receive a tax refund for at least part of the credit.
- The Recovery Act expanded the credit, so that families can begin qualifying with every dollar earned over $3,000 – down from $8,500 last year. These changes apply for 2009 and 2010.
Earned Income Tax Credit:
- Designed to help low-income workers continue working, the refundable credit ranges from $457 for no qualifying children up to $5,657 for three or more qualifying children.
- Under the Recovery Act, the credit is temporarily expanded to include families with 3 or more children.
- To qualify, a person’s income must be less than $13,440 with no qualifying children, $35,463 with one child, $40,295 with two children and $43,279 with three or more children. If married filing jointly, these amounts increase by $5,000.
- Investment income must be $3,100 or less for the year.
- The changes to this credit for taxpayers with three or more qualifying children and for married taxpayers apply for 2009 and 2010.
New parents also can look forward to other tax benefits, such as College Savings Plans and the Child Care tax credit. For more information about the tax benefits of having a child, visit www.hrblock.com/lastbaby.
Courtesy of Debbie Fitzgerald, 770-887-6060, debbie@fitzgeraldpr.com
About H&R Block
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