Family First Act Expands Child Tax Credit to $4,200 but Eliminates Head of Household Status and SALT Deduction in 2026

The Family First Act is a massive overhaul of the tax code, set to kick in for the 2026 tax year. This bill is a classic example of giving with one hand while taking away with the other. It introduces huge, fully refundable tax credits for families, but it wipes out some of the biggest deductions and filing statuses that many middle-class Americans rely on.

The Big Win: A $4,200 Tax Credit for Young Kids

Starting in 2026, the Child Tax Credit (CTC) gets a serious upgrade and becomes fully refundable, meaning you get the money even if you don’t owe federal income tax. For every child under age 6, the credit jumps to $4,200. For every other child under 17, it’s $3,000 (Sec. 101). This is a game-changer for working families, especially those with young kids and lower incomes, who will see the full credit amount. For instance, a family with a 4-year-old and a 10-year-old could be looking at $7,200 back, provided their Modified Adjusted Gross Income (MAGI) is over $20,000. Below that $20,000 threshold, the credit phases in proportionally.

Alongside the CTC, the bill simplifies and increases the Earned Income Tax Credit (EITC) for those with children (Sec. 201). The maximum credit cap for joint filers with kids rises to $5,000, and the income thresholds used to calculate the credit are significantly raised. This is designed to put more cash in the pockets of America's lowest-wage workers, making the EITC a much more powerful tool for financial stability.

New Territory: The Pregnant Mother Credit

One of the most unique provisions is the creation of a new federal tax credit for pregnant mothers (Sec. 102). If a physician certifies that an unborn child has reached 20 weeks of gestation, the mother can claim a credit of up to $2,800. Like the CTC, this credit is income-dependent and phases out for high earners. This is designed to help with the costs of pregnancy and early preparation. However, there’s a catch: to claim it, the mother must sign a sworn statement that she is the biological mother or intends to keep and raise the child. Crucially, the credit is explicitly denied if the loss of the child was due to an induced abortion, though exceptions are made for life-saving treatments or ectopic pregnancies. This provision ties a tax benefit directly to medical decisions, which is a significant change in tax policy.

The Trade-Offs: What Gets Cut

To balance these massive new credits, the bill eliminates several long-standing tax benefits, which will hit many taxpayers hard, particularly those in higher-cost areas or single parents:

1. Goodbye, Head of Household

This is a massive structural change. The bill completely eliminates the Head of Household filing status (Sec. 203). This status is critical for single parents or those supporting dependents, as it provides a higher standard deduction and more favorable tax brackets than the Single filer status. While the bill increases the standard deduction amount for others to help compensate (raising the figure used in Section 63 from $3,000 to $12,000), single parents who relied on Head of Household status will likely see their tax liability increase significantly. If you are currently a single parent, you’ll need to figure out if the expanded CTC and EITC will offset the loss of this filing status.

2. The SALT Deduction is Gone for Individuals

Starting in 2026, individual taxpayers will no longer be able to deduct State and Local Taxes (SALT) paid, which includes state income tax and property tax (Sec. 205). This deduction is primarily used by itemizers in high-tax states. If you own a home and itemize your deductions, the loss of the ability to deduct your property taxes and state income taxes will mean a substantial jump in your taxable income. This change will shift a heavy financial burden onto residents of states like New York, California, and New Jersey, effectively increasing their federal tax bill.

3. No More Dependent Exemption

The bill zeros out the additional exemption amount you could claim for dependents (Sec. 202). While the expanded CTC is intended to replace this benefit, the elimination of the dependent exemption removes a foundational piece of the tax code, which could complicate things for taxpayers who don't qualify for the full CTC.

4. Childcare Credit Gets Stricter

If you have a teenager, pay attention to this one. The Child and Dependent Care Credit, which helps offset the costs of care necessary for you to work, is restricted (Sec. 204). For care expenses outside the home, the child must now be age 17 or older (or disabled). This means parents can no longer claim this credit for care expenses for children aged 13, 14, 15, or 16, unless that child is physically or mentally incapable of self-care. If you rely on this credit for after-school programs or summer camp for your middle-schooler, that benefit is effectively gone.