Parents Could Get a Bigger Tax Break in 2026 Here's How to Lock It In Now
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Parents could see a bigger refund next year thanks to updates to the Child Tax Credit and other family-friendly IRS changes taking effect in 2026.
The Child Tax Credit rises to a maximum of $2,200 per child for 2025, and beginning in 2026, it will be indexed for inflation, allowing it to increase automatically in future years. That means larger credits, and potentially smaller tax bills, for families across all income levels.
What's changing
Families who qualify for the credit can reduce their tax bill by up to $2,200 per child, and some may even receive part of the credit as a refund. Because it's a direct offset against what you owe, it's one of the most valuable tax breaks available to parents.
The IRS also announced adjustments to several related credits that could further boost 2026 refunds:
- Adoption credit: Up to $17,670 in 2026, with as much as $5,120 refundable for qualifying families.
- Earned Income Tax Credit (EITC): Up to $8,231 for families with three or more children.
- Employer-provided childcare credit: Expanded to encourage more companies to offer on-site or contracted childcare support.
What families should do now
Parents can prepare early by reviewing their W-4 withholding for 2026. Adjusting it ensures you're not overpaying or missing out on part of your refund. The process is simple through your employer or directly via the IRS website.
You can also plan ahead for how to use that extra refund money. Rather than letting it sit idle, consider putting it in one of today's top high-yield savings accounts to earn 4.00% or more while you decide how to use it.
If you're thinking longer term, this is also a good opportunity to invest some of that refund toward your retirement. You can compare the best IRAs for 2025 to find one that fits your family's goals and income limits.
The takeaway
The 2026 tax year brings quiet but meaningful changes for families -- more flexible credits, higher income thresholds, and inflation adjustments that will make a real difference at filing time. A few small steps now could help you keep more of what you earn and make next year's refund go even further.
Our Research Expert
Jake FitzGerald is a full-time Editorial Strategist and Personal Finance Writer at Motley Fool Money, leading content production and distribution while also writing about credit cards, bank accounts, and other financial products. He has more than a decade of experience editing and shaping financial content to give readers clear, trustworthy money advice. His work focuses on delivering practical insights that empower people to make smarter financial decisions. Off the clock, he’s a fan of college football tailgates and still loyal to his favorite putter -- despite what his short game suggests.