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$1,000 child tax credit. For 2014, a new baby also delivers a tax credit of up $1,000, even if the child was born late in the year. Unlike a deduction that reduces the amount of income the government gets to tax, a credit reduces your tax bill dollar-for-dollar.
A tax deduction reduces the income subject to tax. A tax credit is a dollar-for-dollar reduction of the tax. The tax credit for child and dependent care expenses allows taxpayers to claim a credit for expenses paid for the care of children under age 13 and for a disabled spouse or dependent. In order to claim the credit, taxpayers must meet numerous requirements for the taxpayer, the expenses, and the qualifying person.