My wife and I are foster parents, and long story short we are planning to adopt three kids this year. In anticipation of this I went ahead and considered the kids as dependents for 2021 and updated my W4 at work. We already have one biological child.
Interestingly, going from one child to four apparently means that I now pay $0 in federal taxes. Previously I was paying about $113 per paycheck (about $2,940 annually). Gross income is about $72,000 annually. The simple math makes sense with the child tax credit: $2,000 x 4 = $8,000 which is much more than what I was paying annually in taxes. But, I'm worried that there is some sort of cut-off or minimum tax payment that I should look out for.
Is paying nothing to the Fed okay if my tax credits are large enough? My gut says that at my income level I should be paying something (but I'm okay if I don't have to...)