October 1, 2026

Raising a family is not easy on anyone’s bank account, but a number of recent tax law changes could make those burdens a little easier to bear. Here are a few highlights to help you get the most out of every tax-saving opportunity.

Child Tax Credit and Earned Income Credit Both Increase

For tax year 2025, the maximum Child Tax Credit (CTC) increased to $2,200 per qualifying child and remains at that amount for 2026. In addition, the credit is now indexed for inflation in future years. Up to $1,700 of the CTC may be refundable through the Additional Child Tax Credit, so eligible people may receive most of the credit as an IRS refund even if they do not owe tax. The maximum Earned Income Tax Credit (EITC) has risen for both individuals and families as well. An increase in the investment income limit for EITC eligibility may also enable more people to qualify for the credit.

In order to claim the CTC and/or EITC, you must have a valid Social Security number (SSN), and your qualifying children must have valid SSNs as well. If you omit or incorrectly enter a required SSN on your tax return, your credit claim may be automatically denied.

Changes to Dependent Care and Adoption Tax Credits

If you pay care expenses for your young children or other dependents who cannot care for themselves, then you may qualify for a tax credit that partially offsets those costs. The Child and Dependent Care Credit may now cover up to 50% of qualifying care costs you pay in order to work or seek work, up from a maximum of 35% in previous years. The qualifying-expense limits remain $3,000 for one qualifying person and $6,000 for two or more qualifying persons, which produces a maximum credit of $1,500 or $3,000. In addition, new income phase-out rules will enable some middle-income households to claim larger credits than before.

Meanwhile, the adoption tax credit helps families cover a wide range of expenses associated with the adoption process. A statutory change in 2025 made up to $5,000 of the credit refundable (up to $5,120 in 2026).

New Options for Tax-Advantaged Accounts for Children

Savings plans that receive favorable tax treatment help young ones get a leg up on life. In addition to creating the new Trump accounts, the 2025 One Big Beautiful Bill Act (OBBBA) added flexibility to Section 529 tuition savings plans. Beneficiaries of 529 accounts may now take tax-free withdrawals for a variety of K-12 school expenses, in addition to higher education costs. The OBBBA also extended previous laws that make it easier to roll a 529 plan over to a Roth IRA or ABLE account if the beneficiary does not need the money for education.

Everyone dreams of providing security to their loved ones, and these new and expanded tax benefits can help make those dreams a reality. However, getting the most out of any IRS program depends on careful planning and attention to every detail. A tax professional can help you make the right moves at the right times.