SUBSCRIBE
Enter your Name and Email address to get
the newsletter delivered to your inbox.
Please include name of person that directed you to my online newsletter so I can thank them personally.
Robert L. Davis, CPA
Financial Advisor
Crystal D. Davis, CFP®
Financial Advisor
Davis Financial Services, LLC
Park Place Professional Center
5871 Allentown Road
Camp Springs, MD 20746
Phone: 301-702-9300
Website: www.davisfinancialsvcs.com
March/April 2026
Family Tax Credits
In 2026, there are some changes to the credits related to families and children, most notably the Child Tax Credit and the Child and Dependent Care Tax Credit. These credits include a phase-out structure based on certain income thresholds.
The Child Tax Credit
For 2026, the amount is $2,200 per qualifying child. In the future, under OBBBA, the credit amount will be adjusted annually for inflation. The credit phases out for higher-income taxpayers, starting at $400,000 for couples filing jointly and $200,000 for single filers. The phase-out reduces the credit amount by 5% for every dollar earned above these thresholds.Child and Dependent Care Tax Credit
OBBBA introduced two key changes to the Child Dependent Care Tax Credit that take effect in 2026. The tax credit calculation increased from 35% to 50% of qualifying dependent care expenses. Also, there's a new phase-out structure with two tiers based on adjusted gross income (AGI).In the first tier, the credit percentage is reduced by 1% for each $2,000 of AGI over $15,000. The rate cannot be reduced below 35% in this phase. In the second tier, for AGIs above $75,000 ($150,000 for joint filers), the percentage is further reduced by 1% for each $2,000 ($4,000 for joint filers) over that threshold. The floor remains at 20%. The qualifying dependent care expense cap remains $3,000 for one child and $6,000 for two or more dependents.
CONTACT US
Enter your Name, Email Address and a short message. We'll respond to you as soon as possible.
Davis Financial Services, LLC and LTM Marketing Solutions, LLC are unrelated companies. This newsletter was created by LTM Marketing Solutions, LLC and was not written or created by the named financial professional and does not necessarily represent the views and opinions of Avantax Wealth Management® or its subsidiaries.
Avantax affiliated advisors may only conduct business with residents of the states for which they are properly licensed and registered. Securities offered through Avantax Investment Services℠, Member FINRA, SIPC, Investment advisory services offered through Avantax Advisory Services℠, Insurance services offered through an Avantax affiliated insurance agency. Not all products and services are offered by all financial professionals. Products and services listed may only be offered by properly licensed individuals. Davis Financial Services, LLC and Avantax are not affiliated.
The information and opinions contained in this web site are obtained from sources believed to be reliable, but their accuracy cannot be guaranteed. The publishers assume no responsibility for errors and omissions or for any damages resulting from the use of the published information. This web site is published with the understanding that it does not render legal, accounting, financial, or other professional advice. Whole or partial reproduction of this web site is forbidden without the written permission of the publisher.