There’s one benefit to having children besides the joy they can bring you: tax breaks. CCH, a provider of tax information and services, released a list this week of ten ways the tax code benefits parents by helping to defray the costs of raising and educating children. Here’s the list from CCH below. Personal Exemption: A reduction of taxable income of $3,650 in 2010 for each dependent child under age 19 or, if the dependent is a full-time student, under age 24. For divorced parents filing separately, the exemption generally goes to the parent who has custody for the greater part of the year. Child Credit: A reduction of tax of $1,000 per child, which begins to phase out when adjusted gross income exceeds $75,000 for single filers and $110,000 for joint filers. This credit may also be partly refundable depending on the filer’s income. Child Care Tax Credit: A credit based on child care expenses for children up to age 13, or older children if they are physically or mentally incapable of caring for themselves. The credit would be taken against maximum qualifying expenses of $3,000 for one qualifying dependent and $6,000 for two or more. It also equals 35 percent of qualifying expenses for taxpayers with adjusted gross income up to $15,000 and decreases to 20 percent of allowable expenses for adjusted gross income levels of $43,000 or more. Adoption Credit: A maximum credit of $12,150 for a regular adoption, with credit amounts phased out at incomes between $182,180 and $222,180 for both single filers and joint filers. For a special-needs adoption, the credit is figured without regard to the actual expenses paid or incurred in the year the adoption becomes final. Earned Income Tax Credit: Amounts increase for eligible taxpayers with children. Size of increase depends on income level and number of children. Coverdell Education Savings Accounts: Contributions to these accounts are limited to $2,000 per year and earnings in the accounts grow tax-free. Withdrawals also are tax-free if used to pay for qualified educational expenses and can be used to pay for tuition, fees, books, supplies and equipment from kindergarten to post-secondary school. Qualified Tuition Programs (529 Plans): Investment earnings in these plans are not taxed if withdrawals are used for qualified expenses. Contributions to state-sponsored programs are partially or fully deductible on some state tax returns.

Original Source of Ten Tax Breaks for Parents