THE 2026 FAMILY FINANCIAL OUTLOOK

As we move into 2026, the landscape of financial support for families is shifting significantly due to the “One Big Beautiful Bill” (OBBB), a major legislative package signed by President Donald Trump in July 2025.¹ While “child support” usually refers to state-level court orders between parents, the federal government is fundamentally changing how it provides financial “support” to children through the tax code and new savings initiatives.

Here is an overview of the changes taking effect or becoming fully operational in 2026.

1. The Child Tax Credit (CTC) Goes “Permanent” and Adjusts for Inflation

The $2,000 per child credit originally established in 2017 was set to expire at the end of 2025. The new law has made this credit permanent and increased the base amount.²

• The 2026 Boost: Starting January 1, 2026, the maximum credit of $2,200 per child will begin its first annual inflation adjustment.³ This means that as the cost of living rises, the credit amount will automatically increase in future years.

   

• Refundability: The refundable portion (the amount you get back even if you owe no taxes) is also indexed for inflation, projected to be around $1,800 to $1,900 for the 2026 tax year.

• SSN Requirement: A stricter rule is now in place: both the child and the taxpayer must have a valid Social Security Number to claim the credit.⁴

   

2. The Launch of “Trump Accounts”

Perhaps the most radical change is the creation of federal investment accounts for children, which become fully active for contributions in July 2026.⁵

• The $1,000 Seed: For every child born between 2025 and 2028, the government will provide a one-time $1,000 “pilot program contribution” into a tax-deferred account.⁶

   

• Private Growth: Parents and employers can contribute up to $5,000 per year to these accounts.⁷

   

• Investment Strategy: Funds must be invested in U.S. stock index funds (like the S&P 500), allowing the money to grow until the child turns 18, at which point it can be used for education, a first home, or business startup costs.⁸

   

3. Expanded Childcare & Adoption Support

The 2026 tax year introduces higher caps and better terms for families managing the high costs of raising or adopting children.

• Child & Dependent Care Credit: Starting in 2026, families can claim up to 50% of eligible childcare expenses (up to $3,000 for one child or $6,000 for two or more), with the “phase-down” only starting at much higher income levels than before.⁹

   

• Adoption Tax Credit: The maximum credit for adoption expenses increases to $17,670 in 2026, and for the first time, up to $5,120 of this credit is refundable.¹⁰

   

• Employer Incentives: The tax credit for employers who provide on-site childcare has been tripled, rising from $150,000 to $500,000.¹¹

   

4. State-Level Child Support Modernization

While federal law sets the tax tone, the administration has pushed for states to adopt new “modernization” guidelines through the Supporting America’s Children and Families Act.

• Direct Payments: More states are being encouraged to “pass through” child support payments directly to low-income families rather than the state keeping the money to offset welfare costs.¹²

   

• Incarcerated Parents: New federal guidance suggests pausing child support obligations for incarcerated parents until 10 months after their release to prevent “mountainous debt” that makes reintegration impossible.¹³

   

• Prenatal Support: In some states, new guidelines allow mothers to seek child support for medical and nutritional expenses during pregnancy, rather than waiting until after the birth.

Comparison of Federal Support (2025 vs. 2026)