Tax guide for new parents: Child Tax Credit, Earned Income, Social Security and more

If you had or adopted your first child in 2024, filing your taxes may not be a top priority. Yet, even if you're sleep-deprived and haven't left your home in months, the law says you still must prepare a return in 2025.

With a new child, your taxes will get more complicated. On the flip side, however, you may qualify for several new tax credits and deductions. 

Here's what new parents need to know for the 2025 tax season and beyond:

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 tax partner 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," he said.

Many parents apply for this document at the hospital when their baby is born.

If you don't have one for your child, Karls said, you should apply now. But it could take a while for the Social Security Administration to verify your child's birth certificate and identity, so Karls recommends filing for a six-month tax extension while you wait. 

Head of household status

If you're a single parent, for tax purposes you are considered the head of the household. That means you could claim a $21,900 standard deduction for tax year 2024, versus a $14,600 standard deduction for single filers without dependents. 

There are also separate, more favorable tax brackets for a head of household.

Keep in mind that the IRS won't automatically recognize that you're a single parent and thereby qualify for head-of-household status. You have to check that box or ask your tax preparer to do it. 

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

Generally, people think having a child will lower their tax bill or trigger a larger refund. But in many cases, it depends on a person's income. Taxpayers with lower incomes are typically eligible for more generous tax credits and deductions after they have or adopt 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 2024, you may qualify for a credit of up to $16,810 for any adoption-related expenses you incurred. The expenses could include adoption-related attorney fees, adoption fees and travel costs. You can claim the credit across multiple years, but you cannot claim more than $16,810 for a single adoption.

To claim the full credit, your modified adjusted gross income, which is generally close to your adjusted gross income, must be $252,150 or below. If you make more, the credit begins to taper out. People with a modified adjusted gross income above $292,150 cannot claim the credit.

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

How much is the Child Tax Credit this year? What are the qualifications?

If you became a parent in 2024, you may qualify for the Child Tax Credit if you had an adjusted gross income of less than $200,000, or less than $400,000 if you are filing a joint return with a spouse. 

Child and dependent care credit income limit

If you are employed and pay for child care services, you may qualify for the Child and Dependent Care Credit. To qualify as a new parent, you must have earned income in 2024 and have work-related childcare expenses, among other rules. You can seek the credit for up to $3,000 of expenses for one child, or $6,000 for two or more children. The actual credit is a percentage of those expenses. See IRS Publication 503 for the formulas.

Earned Income Tax Credit qualifications 

Having a child could make you eligible for the Earned Income Tax Credit. If you have one child and your adjusted gross income was $49,084 (filing alone) or $56,004 (filing jointly with a spouse) in 2024, you can claim up to $4,213 in a refundable tax credit.

Make adjustments to your W-4 withholding 

Finally, make sure to fill out a new W-4 form with your employer to reflect that you now have a dependent. This will likely lower the refund you get next year, but it will increase the size of your paychecks going forward, Daniels said, because less money will be withheld.

Daniel de Visé covers personal finance for USA TODAY.