Tax breaks for parents: 2026 deductions and credits
Welcoming a child into your family is a joyful milestone—and with the right planning, the financial side can feel rewarding too. The IRS offers a range of tax credits and deductions designed to support parents at every stage.
These tax breaks for parents and families can help you make the most of your money by reducing your taxable income and potentially increasing your refund. Explore which credits and deductions you may be eligible to claim when you file your 2026 taxes.
Key takeaways
- A variety of family tax credits and deductions can help offset the cost of raising a child and reduce your overall tax liability.
- The Child Tax Credit, Child and Dependent Care Credit, Earned Income Tax Credit and adoption-related tax credits are just a few of the 2026 tax breaks available for parents.
- Understanding how having a child affects taxes can help you maximize tax benefits of having a child.
Understanding tax credits and deductions
Before exploring the tax benefits of having a child and the most common tax breaks available for families, it can be helpful to understand the difference between a credit and deduction. While both tax credits and deductions can help you pay less in taxes, each has a slightly different impact.
- Tax deductions lower the amount of your income that's subject to tax. For example, if you're in the 22% tax bracket, a $2,000 deduction would reduce your tax bill by $440.
- Tax credits offer a dollar-for-dollar reduction in the amount of tax you owe. This means a $2,000 tax credit could reduce your tax bill by $2,000. Some tax credits are refundable, meaning you can receive the remaining amount as a refund if the credit exceeds the amount of tax you owe.
Understanding how credits and deductions work can help you prioritize the tax breaks that deliver the most value—especially as you consider which of the following options may have the greatest impact.
For an up-to-date list of tax credits and deductions for the current tax year, review our comprehensive list of annual tax updates.
1Child Tax Credit
For the 2026 tax year, the Child Tax Credit provides up to $2,200 per qualifying child, depending on your income. Up to $1,700 of this credit is refundable, meaning you may receive this money back as a tax refund even if you owe no tax.
Your child may qualify for the Child Tax Credit if they:
- Are under age 17 at the end of the tax year
- Have a valid Social Security number
- Receive more than half of their financial support from you
- Live with you for at least half the tax year
- Meet US citizenship requirements
Biological, step and adopted children qualify for the credit if they meet the criteria. This credit may also apply when claiming a foster child on taxes, as well as other dependents—including biological siblings or stepsiblings, nieces, nephews and grandchildren.
Are you eligible for the Child Tax Credit?
You can receive the full amount of the Child Tax Credit if your income is $200,000 or less, or $400,000 if you file jointly. You may be eligible for a reduced credit if your income exceeds these limits.
2Credit for Other Dependents
If your dependent doesn't meet the criteria for the Child Tax Credit, you may still be able to claim the Credit for Other Dependents—sometimes known as the family tax credit. The maximum amount you can receive for each dependent is $500. You must be able to claim the child as a dependent on your tax return and meet the income requirements.
Are you eligible for the Credit for Other Dependents?
To claim this tax credit, your dependent must fit the definition of a qualifying child or qualifying relative. You can use this IRS tool to learn whether your child or other dependent qualifies for either the Child Tax Credit or the family tax credit. To claim the full credit, your income must be $200,000 or less if filing single or less than $400,000 if filing jointly. The credit decreases by $50 for every $1,000 your adjusted gross income, or AGI, exceeds these limits.
3Child and Dependent Care Credit
The Child and Dependent Care Credit, sometimes called the daycare credit, is designed to offset the cost of caring for a child under 13 or a dependent with a qualified disability while you work or actively look for work. Care may be provided in your home or through an eligible off-site provider or program.
The IRS allows eligible families to claim a percentage of up to $3,000 in qualifying care expenses for one dependent or $6,000 for two or more dependents. The percentage of expenses you can claim is based on your AGI. For the 2026 tax year, the credit ranges from 20% to 50% of qualifying expenses. This means the maximum credit for one dependent is up to $1,500—or 50% of $3,000—for the year.
When claiming the Child and Dependent Care Credit, you must subtract any employer-based dependent-care benefits from your expenses. In most cases, married couples must file jointly to be eligible for this credit.
Can you claim both child tax credits?
Yes. You can claim both credits on your tax return if you meet the eligibility requirements for each one independently. These credits apply to different expenses and qualifications, and claiming one doesn't prevent you from claiming the other.
4Earned Income Tax Credit
The Earned Income Tax Credit, or EITC, is designed to help low- to moderate-income families. If eligible, you can claim a credit worth up to $8,046, depending on your income, filing status and how many qualifying children you have. This amount is indexed for inflation and rises to $8,231 for the 2026 tax year.
Who qualifies for the EITC?
To qualify for the EITC, your earned income and investment income must fall below certain limits. For example, married couples filing jointly in the 2026 tax year with three qualifying children must have earned $70,224 or less to be eligible. You also can't claim the credit if your investment income exceeds the annual cap of $12,200 for 2026.
Your child must also meet specific eligibility requirements. Generally, the child must have lived with you in the US for more than half the tax year and qualify as your dependent. The child must also be under 19 at the end of the year or younger than 24 if they're a full-time student. Children with permanent and total disabilities qualify regardless of age.
5Adoption Credit
The Adoption Credit is a powerful tax break designed to offer relief to parents who pay for adoption costs out of pocket. For the 2026 tax year, you can claim up to $17,670 in qualified adoption expenses per eligible child.
Qualified expenses generally include reasonable and necessary costs directly related to the adoption, such as home-study fees, travel expenses, adoption fees, attorney fees and court costs. For the 2026 tax year, a portion of the Adoption Credit is refundable up to $5,120 per eligible child. Any remaining credit above the refundable portion is nonrefundable but can generally be carried over for up to 5 years, reducing your future tax liability.
Who can claim the Adoption Credit?
To receive the full Adoption Credit, your modified adjusted gross income, or MAGI, must be at or below the annual threshold. For 2026, the credit begins to phase out at $265,080 and is fully phased out for those with a MAGI of $305,080 or higher. Those who adopt their spouse's child generally aren't eligible for this credit.
6Education credits
If you pay qualified education expenses for yourself, your spouse or a dependent student, you may be eligible for one of two tax credits—the American Opportunity Tax Credit and the Lifetime Learning Credit. Here are some general comparisons.
|
American Opportunity Tax Credit |
Lifetime Learning Credit |
|
|---|---|---|
|
Amount |
Up to $2,500 per student per year |
Up to $2,000 tax return per year |
|
Refundable |
Up to $1,000 refundable |
Nonrefundable |
|
Who's eligible |
Students pursuing undergraduate college degrees |
Students pursuing degrees, attending vocational school or taking a course to improve job skills |
|
Qualified expenses |
Tuition, mandatory fees, books and supplies |
Tuition and mandatory fees |
|
Time limit |
4-year limit per eligible student |
Good for unlimited tax years |
Are you eligible for education credits?
Your eligibility for the American Opportunity Tax Credit and Lifetime Learning Credit depends partly on your MAGI, and the limits are adjusted periodically for inflation.
For the 2026 tax year, you can claim the full credit if your MAGI is:
- $80,000 or less if filing as single, head of household or qualifying surviving spouse
- $160,000 if married filing jointly
The credit begins to phase out above these thresholds and is no longer available if your MAGI reaches $90,000 or more, or $180,000 or more if filing jointly.
You can't claim both credits for the same student in the same tax year or use both credits for the same qualified expenses. Likewise, you can't claim either credit if your filing status is married filing separately.
7Medical expense deductions
If you itemize deductions on your tax return, you may be able to write off any qualified medical expenses that exceeded 7.5% of your AGI for the year. In addition to deducting the cost of healthcare expenses for your family, you can deduct some expenses related to pregnancy and childbirth.
Qualified medical expenses include your hospital stay, the cost of prenatal care and delivery, related prescription medication, transportation to receive care, supplies to assist with lactation and the insurance premiums you paid. However, you can't deduct expenses covered by your insurance company or premium costs paid by your employer.
Itemizing is only worthwhile if your total deductions will exceed the standard deduction the IRS allows for everyone in your household. Work with a professional to determine whether itemizing or taking the standard deduction will save you the most money.
New tax-deferred savings accounts for kids
If you've recently had a baby—or plan to grow your family soon—there's a new tax-deferred savings account for kids. While this benefit doesn't provide immediate new parent tax credits or deductions, the tax-deferred growth can help you build dedicated savings for your child's future expenses. The account is designed for long-term savings, and funds generally aren't available for withdrawal until your child turns 18. After that, they can be used for qualified expenses such as education, housing and other eligible needs.
To qualify, your child must be a US citizen with a valid Social Security number and be younger than 18 when the account is opened. These funds grow tax-deferred, meaning you won't pay taxes on earnings while the money remains in the account. Additional contributions of up to $5,000 per year can be made on the child's behalf, although these contributions aren't tax-deductible. Children born between January 1, 2025, and December 31, 2028, are also eligible for an initial $1,000 contribution from the US Treasury. To claim the $1,000 contribution, you must file Form 4547 with your tax return.
How to claim tax breaks for parents
To claim these tax deductions and credits for parents, you'll need to provide your child's Social Security number on your tax return. The IRS may also accept an Adoption Taxpayer Identification Number or Individual Tax Identification Number, although eligibility for certain breaks may be limited. Be sure to keep detailed records and confirm that you meet the eligibility requirements for each credit or deduction.
If you've recently welcomed a baby or are preparing for one, our financial checklist for new parents can help you navigate the process of obtaining a Social Security number and other important financial considerations.
Give their savings a strong start
Build a foundation for your child's future with an education savings account. It's a simple, tax-friendly way to start saving with purpose.
