If you have children in your household, two federal tax credits could put real money back in your pocket, and both have changed enough in 2026 to be worth a fresh look. The good news: the One Big Beautiful Bill, signed into law in July 2025, made the current rules permanent. Families who worried about eligibility tightening when the prior tax law expired can breathe easier, the credit amounts, income thresholds, and qualifying rules are locked in and not going away.
The Child Tax Credit
The Child Tax Credit (CTC) is worth up to $2,200 per qualifying child under age 17 in 2026, a slight increase from the previous $2,000 that is now permanent thanks to the One Big Beautiful Bill, signed into law in July 2025. Of that amount, up to $1,700 is refundable, meaning you can receive it as a refund even if you owe little or no federal tax. To qualify for the refundable portion, your household must have at least $2,500 in earned income. The credit begins to phase out at $200,000 for single filers and $400,000 for married couples filing jointly.
The Child And Dependent Care Credit
Separate from the CTC, the Child and Dependent Care Tax Credit helps offset the cost of daycare, preschool, and after-school care while you work. You can claim up to $3,000 in expenses for one child or $6,000 for two or more, and receive back 20 to 50 percent of those costs depending on your income. Both spouses must have earned income to qualify, with limited exceptions for full-time students or disabled spouses.
A note for grandparents
Grandparents raising grandchildren full-time can claim both credits, but the rules require attention. Your grandchild must live with you for more than half the year, be under age 17, and have a valid Social Security number. If a parent also lives in the home, the parent generally has first claim on the dependency. If you are the sole caregiver, you are on solid ground. If the grandchild does not fully qualify for the CTC, a $500 non-refundable credit for "other dependents" may still be available.
Tax situations vary. IRS Publications 501, 503, and 929 cover these credits in detail, and a tax professional can confirm what applies to your household.
