Why did my return show no money back when I claimed a child?

[SeanE1 · Accepted solution]

Claiming a child as a dependent does not give you "money" back.  When you claim a child as a dependent, it reduces the amount of your taxable income by $4,050 for each dependent you claim in 2016.  For example, say you have $40,000 in taxable income, if you claim your child as a dependent, your taxable income is reduced to $35,950.  So instead of paying taxes on $40,000 in income you are now paying taxes on only $3,950 of income.  If you have two dependents or exemptions, your taxable income would be reduced to $31,900, ($40,000-$4050-$4,050).  That is how dependencies or exemptions work.  They reduce the taxable income you pay taxes on which in turn results in a lower tax bill or possible refund.