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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.
The deduction is not available to nonresidents. Taxpayers must retain all expense receipts as proof of the amounts paid. The deduction is limited to $5,000 per dependent. For 2009 and 2010, The deduction is for 50 percent of the costs paid per dependent, limited to $5,000. If a dependent's expenses exceed $10,000, the deduction is limited to $5,000. If one dependent's expenses are $8,000 and the second dependent's expenses are $12,000âthe total deduction allowed is $4,000 for the first dependent and $5,000 for the second dependent for a total deduction of $9,000.