One change that will affect you is the Child Tax Credit has been increased to $2200 per child.
Other changes include:
- Higher Standard Deductions (less taxable income)
- Tax Breaks on Overtime and Tips
- Auto loan interest deduction
Also, beginning this year, you can establish Trump Accounts under the Working Families Tax Cuts initiative:
Overview of Trump Accounts
- Parents, guardians, or others can establish a Trump Account for an eligible child.
- Trump Accounts cannot be funded before July 4, 2026.
- The federal government will make a one-time $1,000 contribution for each eligible child’s account.
- Authorized contributions from individuals and employers are allowed up to $5,000 per year.
- Employers can contribute up to $2,500 per year toward an employee’s or dependent’s Trump Account without it counting as taxable income for the employee.
- Funds must be invested in certain mutual funds or exchange-traded funds that track a U.S. stock index such as the S&P 500.
Withdrawal and use
- Generally, money cannot be withdrawn before the year the child turns 18.
- After that point, the account is treated like a traditional IRA with similar tax rules.
For more details, please see the IRS OBBB provisions, linked here.
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