Millions of parents are filing their taxes right now, and for many families, the process can feel confusing and overwhelming.That confusion can be costly. Missing a tax credit you qualify for could mean leaving thousands of dollars unclaimed.One of the biggest mistakes parents make is assuming the IRS will correct an oversight.”The number one mistake, which really canvasses all of tax return preparation, is that if you leave off a benefit, the IRS will catch that and just send you more money later,” said Mark Steber, Chief Tax Information Officer for Jackson Hewitt. “And nothing could be more incorrect or far from the truth.”Steber says there are several tax credits for parents and caregivers. Child Tax CreditFor tax year 2025, the Child Tax Credit is worth up to $2,200 per qualifying child under age 17, subject to income phaseouts.While the Child Tax Credit itself reduces taxes owed, up to $1,700 may be refundable through the Additional Child Tax Credit if a taxpayer meets earned income requirements. That means some families may receive money back even if they do not owe federal income tax.Child and Dependent Care CreditParents who pay for care so they can work may qualify for the Child and Dependent Care Credit.The credit applies to a percentage of qualifying expenses — up to $3,000 for one child or $6,000 for two or more children. The percentage ranges from 20% to 35%, depending on income.At the maximum 35% rate, that could translate to a credit of up to $1,050 for one child or $2,100 for two or more.Earned Income Tax CreditAnother credit families sometimes overlook is the Earned Income Tax Credit, which is available to working taxpayers who meet income and filing status limits.For tax year 2025, the maximum EITC is slightly more than $8,000 for families with three or more qualifying children. The exact amount depends on income, filing status and number of children.Many families assume they earn too much to qualify, Steber said, but eligibility thresholds are higher than some expect.Adoption CreditFamilies who adopted a child may also qualify for the federal Adoption Credit.For tax year 2025, taxpayers may claim up to $17,280 in qualified adoption expenses per eligible child, subject to income phaseouts.”It’s the biggest I’ve seen in my 40-year career, and it’s also a very nice tax benefit,” Steber said.Divorce and shared custody complicationsDivorce and shared custody arrangements can complicate who is eligible to claim a child for tax purposes.Under IRS rules, only one taxpayer may claim a child as a dependent in a given year. Generally, this is the custodial parent who has the child for the majority of the year. In many cases, who claims a child is addressed in a divorce decree or custody arrangement.”It’s not who files first,” Steber said. “There’s a very, very clear set of rules on who qualifies.”However, the IRS does not review court agreements or custody paperwork at the time a return is electronically filed. If two taxpayers claim the same child, the first return processed may be accepted, while the second is typically rejected and may require additional documentation. The IRS then applies its tie-breaker rules to determine who is legally entitled to claim the child.Resolving duplicate claims can take weeks or even months and may delay a refund — even if the second filer ultimately qualifies under IRS rules.”Gone are the days of the very simple nuclear family,” Steber said. “A lot of people have very complicated tax structures related to their families, and those rules can trip you up.”Parents who have experienced major life changes — such as having a child, adopting, divorcing or modifying custody arrangements — may want to review IRS eligibility rules carefully or consult a qualified tax professional before filing. The federal filing deadline this year is April 15.
Millions of parents are filing their taxes right now, and for many families, the process can feel confusing and overwhelming.
That confusion can be costly. Missing a tax credit you qualify for could mean leaving thousands of dollars unclaimed.
One of the biggest mistakes parents make is assuming the IRS will correct an oversight.
“The number one mistake, which really canvasses all of tax return preparation, is that if you leave off a benefit, the IRS will catch that and just send you more money later,” said Mark Steber, Chief Tax Information Officer for Jackson Hewitt. “And nothing could be more incorrect or far from the truth.”
Steber says there are several tax credits for parents and caregivers.
Child Tax Credit
For tax year 2025, the Child Tax Credit is worth up to $2,200 per qualifying child under age 17, subject to income phaseouts.
While the Child Tax Credit itself reduces taxes owed, up to $1,700 may be refundable through the Additional Child Tax Credit if a taxpayer meets earned income requirements. That means some families may receive money back even if they do not owe federal income tax.
Child and Dependent Care Credit
Parents who pay for care so they can work may qualify for the Child and Dependent Care Credit.
The credit applies to a percentage of qualifying expenses — up to $3,000 for one child or $6,000 for two or more children. The percentage ranges from 20% to 35%, depending on income.
At the maximum 35% rate, that could translate to a credit of up to $1,050 for one child or $2,100 for two or more.
Earned Income Tax Credit
Another credit families sometimes overlook is the Earned Income Tax Credit, which is available to working taxpayers who meet income and filing status limits.
For tax year 2025, the maximum EITC is slightly more than $8,000 for families with three or more qualifying children. The exact amount depends on income, filing status and number of children.
Many families assume they earn too much to qualify, Steber said, but eligibility thresholds are higher than some expect.
Adoption Credit
Families who adopted a child may also qualify for the federal Adoption Credit.
For tax year 2025, taxpayers may claim up to $17,280 in qualified adoption expenses per eligible child, subject to income phaseouts.
“It’s the biggest I’ve seen in my 40-year career, and it’s also a very nice tax benefit,” Steber said.
Divorce and shared custody complications
Divorce and shared custody arrangements can complicate who is eligible to claim a child for tax purposes.
Under IRS rules, only one taxpayer may claim a child as a dependent in a given year. Generally, this is the custodial parent who has the child for the majority of the year. In many cases, who claims a child is addressed in a divorce decree or custody arrangement.
“It’s not who files first,” Steber said. “There’s a very, very clear set of rules on who qualifies.”
However, the IRS does not review court agreements or custody paperwork at the time a return is electronically filed. If two taxpayers claim the same child, the first return processed may be accepted, while the second is typically rejected and may require additional documentation. The IRS then applies its tie-breaker rules to determine who is legally entitled to claim the child.
Resolving duplicate claims can take weeks or even months and may delay a refund — even if the second filer ultimately qualifies under IRS rules.
“Gone are the days of the very simple nuclear family,” Steber said. “A lot of people have very complicated tax structures related to their families, and those rules can trip you up.”
Parents who have experienced major life changes — such as having a child, adopting, divorcing or modifying custody arrangements — may want to review IRS eligibility rules carefully or consult a qualified tax professional before filing.
The federal filing deadline this year is April 15.
