PART 2 of our 3-Part Series Breaking Down the New Tax Law Changes
The One Big Beautiful Bill Act introduces a wide range of tax changes aimed at helping Americans across different life stages—from early-career workers to families and those approaching retirement. Whether you're earning tips, raising kids, or planning your estate, the bill includes new deductions, expanded credits, and planning opportunities designed to support your financial goals. The following sections break down key provisions to help you understand what’s changing and how you can prepare.
Part 2: What Families Need to Know
New Child Credits, Education Incentives, and Dependent Care Support
If you’re raising children or planning for education, this part of the bill offers expanded tax credits, savings options, and benefits starting in 2025 and 2026.
1. Child Tax Credit
- Increases from $2,000 to $2,200 per child in 2025
- Indexed to inflation going forward
2. American Family Account
- Available for children born 2025–2028
- Government contributes $1,000 one-time
- Parents may contribute up to $5,000 per year
- No withdrawals before age 18
3. Dependent Care Flexible Spending Accounts
- Annual contribution limit rises from $5,000 to $7,500 in 2026
- Up to 50% of qualified expenses covered (up from 35%).
4. 529 Plans Expanded
- Now cover non-tuition K–12 expenses
- Tuition-related withdrawal cap doubles from $10,000 to $20,000 in 2026
What Should Families Do Now?
- Review savings and tax strategies
- Talk to a financial advisor at Scarborough Capital Management
- Plan if expecting a child in 2025–2028.
Read Part 3 → In Part 3, you’ll learn about new tax changes that affect older adults, retirees, and individuals focused on estate planning.
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