Is it true that if a couple has a certain number of children they don't have to pay taxes???

Question

I have heard that if a couple has more than 6 children they are not required to pay Federal taxes. Does anyone know if that is true?

Answer 1

Your statement is true in part... In tax, there are different exemptions which help determine tax liability...

For 2007, if a married couple has 6 children and file taxes, their tax liability would be zero on the following amount:

Standard deduction - 10,700 (married filing jointly)
Personal exemptions (husband + wife + 6 children) = 3400 * 8 = 27,200

Thus, as long as the family earns less than 37,900, there will be no tax liability.. In this case, however, the family can actually make money off the government...

There is the earned income credit which is a refundable credit... You get this regardless of if your tax liability is zero or not.. Also, there is also the child tax credit (1,000 per child as long as they are under 17)...

Thus, you can in actuality, make 6,000 in child tax refund in addition to all federal income taxes paid in to the IRS... Also, there is the EIC as well..

Overall, this person could get 10K or more as a refund...

Answer 2

No. There is not a number of children that results in a complete exemption from tax. More children does result in more income being exempt, but only a few thousand per child. In a particular case, a couple might have more income than would be exempt for a couple with 5 children and less than would be exempt for a couple with 6 children, in which that particular would no longer have to pay tax if they had a 6th child, but they would have to resume paying tax if their income rose to more than the amount that is exempt for a couple with 6 children. Even a couple with 1000 children would have to pay income tax if their income was more than their deductions and exemptions (several million dollars).

Answer 3

Not exactly, but having 6 dependent children would give them enough deductions that unless they had a very high income, they wouldn't pay taxes. If their income for example was $70K for the year, and all of the kids were under 17 so they got the child tax credit for them, they wouldn't owe any tax. But if they made $150K for the year, they'd still owe tax even with the 6 kids.

Answer 4

Depends upon their income. A couple with 6 children filing a joint return won't pay any Federal income tax until their combined income (the parents', not the kids) exceeds $37,900 in 2007. They will pay Social Security and Medicare taxes and probably some state taxes as well.

Depending upon their income they may receive one or two refundable credits, the Earned Income Credit and the Additional Child Tax Credit. This could effectively raise the amount of income the couple could have significantly before they'd pay any tax.

Answer 5

No, it's not true. If said couple has an income sufficiently high to trigger an income tax liability, they must pay income tax. Whether or not there is a tax liability is based upon the levels of taxable income, reduced by the number of qualified dependents one has.

Answer 6

Even if your children were enough to reduce your tax liability to zero, a taxpayer can still owe alternative minimum tax. The AMT form doesn't have any entries for dependents.