Claiming your child as a dependent is an excellent way of reducing your taxable income so you pay less money to the IRS. But what if you have no taxable income? For example, can a stay-at-home mom claim a child on taxes? And is it worth doing so?
Well, everything depends on your situation. Under some circumstances, it is best for you to claim your child on your taxes even in the absence of taxable income. However, you need to remember that not every child of yours will qualify as a dependent.
So, it helps to understand why it may be worth filing taxes and claiming your child as a dependent when you have no taxable income. Also, you should learn how to determine if your child is a dependent.
What Constitutes Taxable Income?
There is a difference between gross income and taxable income. The former refers to all income you obtained during the tax year from all sources, including dividends, wages, fringe benefits tips, real estate income and retirement benefits, among others. And the latter refers to the income amount that is subject to taxation. To arrive at your taxable income , you must first subtract the permitted deductions.
Below are some of the circumstances under which you may not have taxable income.
- When you only get income that may not be subject to taxation at all, you will not have taxable income. These include some inheritances, child support payments and welfare benefits, among others. They are usually excluded when calculating your tax liability.
- If you earn a low income, you could end up with zero taxable income. For example, if you earned $12,550 in the 2021 tax year, you would not have any tax liability if you claimed the standard deduction for singles. Your tax liability would have gone down to zero after deductions.
- When you earn a decent income and itemize your deductions, if you claim enough of them, you could decrease your taxable income to zero.
- If you don’t work at all and have no other sources of income, you won’t be subjected to taxation.
When Can You File Taxes If You Didn’t Work and Have a Child?
Can you claim your kid if you don't work? And if you have no income, can you get a tax refund? The answer to both questions is yes.
Generally, you cannot claim a tax refund without filing taxes, and the IRS expects you to do so even when you have no income. If you don’t file on time, you can still file an original return within three years of its due date.
And if you are wondering, “What happens if I don't claim my child on taxes?” Well, it depends. If you have no taxable income, you risk losing the refund owed to you from the credits you qualify for since they depend on the number of dependents you have. And if you have taxable income, you will pay more than you should to the IRS.
Some of the credits you may qualify for when you claim your children include:
- Earned income tax credit (EITC)
- Child and dependent care credit
- Credit for other dependents
- Recovery rebate credits
- Education credits
Who Is a Qualifying Child?
Not every child you have qualifies as a dependent. Below are some basic criteria your child must meet if you are to claim them on your taxes as a qualifying dependent.
- Your child must have a valid Social Security Number (SSN)
- Your child must have a legally acceptable relationship with you. The IRS accepts biological and step-children, adopted children and foster children. You can also include your siblings, half-siblings and step-siblings. In addition, your qualifying children could be related to you as your grandchildren, nieces or nephews.
- Your child must be younger than you or your spouse and under the age of 19, or under 24 years and a full-time student in an IRS-acceptable institution or course for at least five months of the year. However, any adult child regardless of age could be your dependent if they have a total and permanent disability in the tax year you claim them.
- Your child should live with you at home in the U.S. for at least six months of the year unless they are exempt from doing so. But if your child’s absence is due to schooling, military service, detention in a juvenile facility, illness or kidnapping, that time away still counts in your favor.
- Your child cannot be claimed as another taxpayer’s dependent unless that person is your spouse with whom you file a joint return. However, if you live apart from your spouse, they may be allowed to claim your child as a dependent for Earned Income Tax Credit. And in that case, you would need to sign Form 8832 to allow the noncustodial parent to claim your child as a dependent. It is also the form you would have to complete to revoke their claim. There should be a form for every qualifying child.
Once you have gathered all the information you need even if you don’t have an income, you can claim your children on taxes by filing Form 1040 or 1040-SR provided the kids qualify as dependents.
However, you may need to attach various schedule forms, depending on your income earning situation and the credits you intend to claim. So, find out the correct forms to complete to ensure you get your refund.
Can you file taxes with no income but have a child?
A10. No. You do not need income to be eligible for the Child Tax Credit if your main home is in the United States for more than half the year
. If you do not have income, and do not meet the main home requirement, you will not be able to benefit from the Child Tax Credit because the credit will not be refundable. more
Can I file taxes with no income and a child? Yes, a single mother with a child, but no income, can file a tax return
. There is, however, no reason to file a return if you have have no income. more
Can you get child tax for third child?
If you already have three or more children all born before 6 April 2017, then if you need to claim benefits, you'll get help for all your children. However, if your third child, or any other younger children, were born after 6 April 2017, you won't get extra money for them
Which parent gets the child tax credit?
The CTC advance payments should go to the parent who lives with the child for more than half the year in 2021
. In this case, the CTC advance payments should go to you, and you should claim the remaining half of the CTC when you file your 2021 tax return in 2022. more
Are we still getting child tax credit?
The American Rescue Plan, signed into law on March 11, 2021, expanded the Child Tax Credit for 2021
to get more help to more families. It has gone from $2,000 per child in 2020 to $3,600 for each child under age 6. For each child ages 6 to 16, it's increased from $2,000 to $3,000. more
Who file the income tax return?
As per the current income tax laws, an individual below 60 years of age is required to file ITR if his/her gross total income exceeds Rs 2.5 lakh in a financial year
. This is irrespective of the income tax regime (old vs new) chosen by him. Read on to know if you have to file ITR. more
Is child tax credit extending? The child tax credit was temporarily expanded for 2021
under the American Rescue Plan Act passed by Congress in March 2021. The legislation made the existing $2,000 credit per child more generous, with up to $3,600 per child under age 6 and $3,000 per child ages 6 through 17. more
Will Child Tax Credit continue 2022? Families are Eligible for Remaining Child Tax Credit Payments in 2022
. If families get a letter from the IRS saying how much they received from the advance CTC, they should keep the letter because it will have important information for filing their 2022 return. more
Will I receive the Child Tax Credit if my child turns 18 in 2021?
Age is determined on December 31, 2021. If your child turns 18 this year, then they are not eligible for the monthly Child Tax Credit
Who must file a tax return? Most U.S. citizens – and permanent residents who work in the United States
– need to file a tax return if they make more than a certain amount for the year. You may want to file even if you make less than that amount, because you may get money back if you file. more
Is child tax credit the same as child benefit?
Tax credits and benefits. Child tax credit (CTC) is paid by HMRC to support families with children. It is paid independently of child benefit
and you can claim whether you are working or not. more