6 Tax Credits Every Parent Should Know Ahead of Time for Tax Year 2026
It’s never too soon to start thinking about tax year 2026. The more parents know about available tax credits, the more opportunities for a lower tax bill.
Most years, parent tax credits don’t change much, but not this year, said George Dimov, Certified Public Accountant, founder and CEO at Dimov Tax. A couple of credits have changed for tax year 2026, so you’ll want to catch up before filing your taxes. Keep reading to learn about six tax credits for parents that can put more money in your pocket.
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1. Child and Dependent Care Credit
If you pay a qualified organization for childcare so you can work, you might be eligible for the child and dependent care credit, according to the IRS. To qualify, the dependent(s) typically must live with you for more than half the year and be under age 13 — or a disabled spouse or dependent of any age unable to care for themselves.
For the 2026 tax year, you can claim up to 50% of eligible expenses on a maximum of $3,000 of work-related care for one child and up to $6,000 of work-related care for two or more children, according to Dimov.
2. Dependent Care FSA
A pre-tax benefit, a Dependent Care FSA account can be used to pay for services such as preschool, summer day camp, before and after school programs, child or adult daycare and other eligible services, according to FSA Feds.
For the 2026 tax year, the Dependent Care FSA limit is $7,500 and the money cannot be used for the both the FSA and the Child and Dependent Care Credit, Dimov said. He noted that a lot of families get the FSA wrong, which probably isn’t surprising, given the similarities between the two.
“For a time the FSA was the better choice but now that the credit is 50%, a lot of families with lower and middle incomes are better off taking the credit,” he said.
3. American Opportunity Tax Credit
The American Opportunity Tax Credit covers dependents enrolled at an eligible postsecondary educational institution, according to Fidelity. Students must be pursuing a degree or equivalent credential and enrolled at least part-time for a minimum of one academic period.
Your AOTC is determined based on 100% of the first $2,000 of qualified education expenses and 25% of the next $2,000 of qualified education expenses, according to Fidelity. The maximum annual credit is $2,500 per student — with up to $1,000 available for refund.
“This year the student needs a Social Security number to get the credit, so make sure they have one and keep the 1098-T form that the school sends,” Dimov said.
4. Child Tax Credit
If your child will be under age 17 at the end of the tax year, has lived with you for more than half the tax year and is claimed as a dependent on your return, you may qualify for the Child Tax Credit, according to the IRS. This non-refundable credit is worth up to $2,200 per eligible child.
Remembering to provide supporting paperwork with your return is key, Dimov said.
“The child and [at] least one parent on the tax return each need a Social Security number by the time you file your taxes,” he said. “You cannot use an ITIN anymore, which is a problem for families [who are] not all citizens and families who just got here.”
5. Additional Child Tax Credit
If you have earned income of at least $2,500, but have little or no federal income tax liability, you may qualify for the Additional Child Tax Credit, according to the IRS. A refundable credit, you may be eligible to receive up to $1,700 per qualifying child.
“Parents should maintain accurate income and dependent records throughout the year to ensure they qualify for the maximum refundable amount when filing their return,” said Hardik Patel, founder and financial advisor at Trusted Path Wealth Management.
6. Adoption Credit
If you adopt a child in 2026, you may qualify for the Adoption Credit. Refundable up to $5,000, qualified expenses include costs such as adoption fees, attorney fees, court costs and travel costs. “Families considering adoption should keep organized records of all qualified expenses from the beginning of the adoption process,” Patel said. “Maintaining thorough documentation can help maximize the credit and streamline tax preparation.”
Families that finalized adoptions in 2026 can receive a maximum credit of $17,670 per adopted child, according to the National Council For Adoption.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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