Do you have a child or other dependent that you claimed on last year’s tax return? Are you sure you reported and claimed them correctly?
Here are a few tax code changes this year relating to your dependents that you may have missed on your tax return. If you need to make adjustments, it’s not too late to file an amended tax return!
1) The definition of a “qualifying child” has changed! In order to be considered a “qualifying child,” the child:
- Must be younger than you
- Cannot have filed a joint return, unless the return was filed to claim a refund
- If the parent of the child can claim the child as a qualifying children but no parents claims the child, no one else can claim the child as a qualifying child unless that person’s AGI is higher than the highest AGI of any parent of the child
- The child is a qualifying child for purposes of the child tax credit only if you can and do claim an exemption on the child
2) According to the IRS, in 2009 the maximum adoption credit has increased for individuals with a modified AGI (Adjusted Gross Income) of less than $182,180. The credit is “phased out” if you make between $182,189 and $222,180. That means that you receive less of the credit amount as your AGI goes up. The current tax credit amount is $12,150.
3) The amount of earned income you must exceed to claim the addition child credit has been reduced to $3,000.
4) For those of you with investments in children’s names, the amount of taxable investment income a child can have without it being taxed at the parent’s rate has increased to $1,900.
All information via IRS.gov.
Tags: tax facts, Tax News, Tax Preparation, Tax Tips
This entry was posted on Tuesday, June 30th, 2009 at 7:14 AM and is filed under Tax News. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.
