why can't i claim all 3 kids on my tax return?

Question

I have used TaxAct, TurboTax, and RapidTax. All of them won't let me claim my oldest child which is only 8.
They give me a desent amount for the first child a tiny bit for the second child and nothing for the third child. I am well under the income bracket to qualify for the full credit on all three. Any Ideas?

Answer 1

If you are in a low enough income bracket, it might not help you to claim your third child. This doesn't mean you're not allowed to claim them, it simply means that you are already at $0 in taxable income, and another child can't make that any lower. The earned Income Credit is indeed limited to two children, no matter how much you earn or how many children you have. The rules for the Additional Child tax Credit can get hairy, but you have to have income in excess of $11,750 to qualify, and even then it's typically only a little bit.
It sounds to me like you are only looking at your refund amount, and not at the entire tax return as you add your children. There's more to a tax return than the bottom line, and your child is probably listed on the front page as a dependent. Filing like this, even though there is no additional financial gain to you, will help keep someone else from claiming your child - someone who isn't entitled to.

Answer 2

If the credit that you are trying to claim is the earned income credit, then the answer is that the earned income credit can be claimed for no more than 2 children.

Otherwise, clarify which "credit" you mean. Offhand, I cannot think of any credit that is based on the number of children and that can be claimed for 3 or more children of any person with fewer than 5 children. The earned income credit is the same with 2 children or with 3; it depends only on whether you have 0, 1, or more than 1. The additional child tax credit available only for the 3rd and subsequent child, not for the first two. The credits for education and for childcare expenses are based on expenses, not number of children.

Answer 3

You claim all three as exemptions and child tax credit, although since those can only reduce your tax to zero, if your tax is already zero you won't get a tax benefit for the kids.

The only place that doesn't consider additional kids over two is for earned income credit - for that, there's an amount with one kid, and a larger amount with two or more.

Answer 4

If there is no change in your refund from adding the third child to your tax return, it is because of two things:

First, you have reduced your taxable income to zero by using two children. Adding the third child to your tax return keeps your taxable income at zero. In other words, no change.

Second, the Earned Income Credit pays you depending on whether you have 0, 1, or 2 children. There is no increase in the credit for 3 children.

That is for this year, next year you may "need" the third child on your tax return to get the biggest refund. This year, you don't.

Answer 5

You can put all three kids on the return but the Earned Income Tax Credit maxes out with two kids. You don't get any more EIC for putting the third kid on the return.

Answer 6

You may already be at the maximum that you can get refunded back for the kids. Try putting in the oldest first and going backwards if the result is the same it might just be that you hit the highest amount that you can get back for claiming the kids on your taxes. If you question it though ask an accountant.

Answer 7

If you are talking about Earned Income Credit you will only be able to claim two for EIC purposes. You should be able to claim all three kids, you and your spouse (?) for five personal exemptions.

Answer 8

I was reading on some of those tax forms, I can't remember which, but you only get credit for Two children anyway. You get the most for the youngest child. It doesn't matter if you have 10 kids you will only get earned income credit for 2, hope this helps!!!!

Answer 9

You're talking about the Earned Income Credit - it max'es at two children. You still get to claim the normal exemption amount for all.

Answer 10

Because the gov't doesn't want to encourage people to crank out so many kids. The optimal kid/deduction ratio is "2", one to replace you and your spouse. "3" is just silly, and at "4" they actually start charging you extra. ...or maybe they should.

But seriously, tax software sucks. I start with the blank form and read the directions.