Benefits of claiming a dependent
There are several ways claiming a dependent can save you money at tax time. Here are some examples.
Head of household status
You can qualify for head of household status if you're unmarried or legally separated and have dependents. This filing status gives you a higher standard deduction than you'd get as a single filer, which can lower your marginal tax rate.
Child tax credit
For each qualifying child under age 17 at the end of the year, you may qualify for the Child Tax Credit. The maximum credit is $2,000 per child. To receive the full tax credit, your modified adjusted gross income (MAGI) can't exceed $200,000, or $400,000 if you're married and filing a joint return. If your income exceeds these limits, you could receive a reduced amount.
Earned Income Tax Credit (EITC)
Claiming dependents could help you qualify for the earned income tax credit (EITC), available to working people with low- or mid-level incomes, or receive a larger tax credit.
Someone with no qualifying children and an adjusted gross income of as much as $17,640 (single and head of household filers) or $24,210 (married filing jointly) could receive a maximum credit of $600. But someone with three or more qualifying children could receive as much as $7,430 with an adjusted gross income of $56,838 (single and head of household filers) or $63,398 (married filing jointly).
