The One Big Beautiful Bill Act introduced several updates to the Child Tax Credit and related tax provisions that may affect how you file in the coming year. Here’s a brief overview of what families with dependents should know moving forward.
- Child Tax Credit – for 2025 has risen to $2,200 (up from previous $2,000) per qualifying child under age 17. This credit amount will be adjusted annually for inflation. Additionally, up to $1,700 of the credit is refundable, meaning eligible families may receive this portion as a refund even if they have little or no tax liability. Both the taxpayer and qualifying dependent must have a valid SSN beginning in 2025/2026 to claim this.
- Trump Account – Children born between 2025 and 2028 may also receive a $1,000 government contribution at birth. Families will have opportunities to make additional tax-advantaged contributions, which may be used in the future toward qualifying expenses such as education or a first home purchase up to $5,000. For more information, the official site is Trumpaacounts. gov
- Child and Dependent Care Credit – Beginning in 2026, the maximum Child and Dependent Care credit increases to 50% of eligible expenses for lower-income families, with a 20% floor for high earners. Eligible expenses remain capped at $3,000 for one child and $6,000 for two or more children.
- Dependent Care Flexible Spending Accounts – The annual contribution limit increases from $5,000 to $7,500 this year.
As with any tax law changes, eligibility, benefits, and thresholds vary by household and individual circumstance. Reviewing your personal situation early can help you better understand how to plan for the coming years and potentially take advantage of these benefits. At Killingsworth Spencer, we make it our job to stay up to date on the details of these changes so we can best help you adjust your financial strategies.
For more information or to schedule an appointment, please call us at 770-552-8286. Visit us at www.killingsworthspencerllc.com
Disclaimer: This post is for general information only and should not be taken as legal or financial advice.