People in PA, Income Tax Question about claiming children?

Question

How much money do you get back per child? I heard that it's 1500 from one person and another person told me that you don't get anything. Can someone tell me please? I am not married but I am living w/ my fiancee. He makes me more than me. So should I claim the child since I make less or should he claim the child since he makes more? We're not gonna claim the child til next years income tax b/c the baby will be born next year.

Thank you for your answer and yes he is the father.

Answer 1

On your PA state taxes, dependents don't generally come into play. For low income earners though, they may help you qualify for tax forgiveness or a higher level of tax forgiveness.

On the federal return, it's going to vary because several things can affect your return. 1. You as the lower earner may get Earned Income Credit but not have enough income to get Child Tax Credit. 2. Your fiancee might be able to get Child Tax Credit but make too much to get Earned Income Credit. 3. Even if your fiance makes more than you, because it's a bell curve, it's possible he may still get more Earned Income Credit than you.

Talk to a tax professional, who can run the numbers for you and tell you which way is better to get the higher total refund between you.

Answer 2

PA state tax is a flat rate, with no allowances for children, so having a child makes no difference on your PA taxes..

On your federal return, it's the same for all states. You get one exemption for a child. Since you aren't married, you will be filing separate returns, so either one of you, but not both, can claim the baby. You can figure it both ways and the person who will save the most can claim him/her. The exemption for 2007 is $3400 - it will probably go up a little for 2008 when one of you will claim the exemption. The exemption amount is subtracted from your income for the year before taxes are figured.

The person claiming the child also gets a child tax credit of $1000. This subtracts directly from your tax liability for the year. If you don't owe that much total, it will take your tax for the year to zero - you won't get the extra back.

Depending on circumstances, it's possible you wouldn't get anything, if you don't pay any tax to begin with. But assuming that you do owe some tax for the year, your tax would be decreased if you are the person claiming the child as a dependent.

If the person claiming the child is paying MORE than half of the cost of maintaining the household, that person could most likely file as head of household rather than single, which saves a little more in taxes if you owe any.

Depending on the income of the person claiming the child, that person might also be eligible for an earned income credit because of the child.

Answer 3

There is a $1,000 per child child tax credit, but it is a non-refundable credit (you can't get anything back if you don't have a tax liability). More than likely your fiancee should claim the child (as long as he is the father he can), and he will be able to file as head of household. Also, the child will give him another personal exemption, 3,400 for 2007. Now, if you two get married before the end of 2008 you won't have to worry about who would claim the child, as you'd be filing a return as married filing jointly.

Answer 4

The discern with greater custodial time is entitled to declare the new child(ren) as dependents on their Federal and State tax returns. while you're no longer the discern with maximum people of custodial time yet elect to declare the new child(ren) as dependents, you may enter right into a written contract with the different discern which grants which you will declare the youngsters as dependents. you will could connect a replica of this contract on your tax returns. If the youngsters’s father would not paintings he may well be amenable to this contract because claiming the new child(ren) as dependents would not somewhat supply her with any tax earnings if she has no earnings.