New Working Family Tax Breaks: What Could Be Added to Your Refund

A $1,000 head start for eligible children

The Working Families Tax Cuts created something called a Trump Account for eligible children. Parents, guardians, or others can open one for a qualifying child.

Here is the part families notice first: the federal government will make a one-time $1,000 contribution for each eligible child's account. According to the IRS, 4 million children have already been signed up, and 1 million have claimed the $1,000 pilot contribution.

The money in these accounts is invested in certain mutual funds or exchange-traded funds that track a U.S. stock index, like the S&P 500. Generally, the money cannot be withdrawn before the year the child turns 18. After that, the account is treated much like a traditional IRA.

One date to keep in mind: Trump Accounts cannot be funded before July 4, 2026.

Who can add money, and how much

Beyond the one-time federal contribution, other people can add to the account too. 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 a dependent's Trump Account without it counting as taxable income for the employee. That is a real tax benefit for working parents.

You can view and submit Trump Account elections right inside your IRS Individual Account. There is no fee to set this up through the official IRS channels.

A bigger adoption credit for growing families

Families who adopt got good news too. Beginning with tax years after December 31, 2024, up to $5,000 (indexed for inflation) of the adoption credit may be refundable.

A refundable credit matters because it can put money back in your pocket even if you do not owe that much in tax. One note from the IRS: any credit amount carried forward from prior years cannot be used to calculate the refundable portion.

Health savings changes that could help too

The law also expanded Health Savings Accounts (HSAs). Telehealth and other remote care can now be received before you meet a high-deductible plan deductible, and you can still contribute to your HSA.

Starting January 1, 2026, bronze and catastrophic health plans are treated as HSA-compatible. This makes more people eligible to contribute to an HSA, including some who could not before.

There is also a change to the Premium Tax Credit. For tax years beginning after December 31, 2025, the limits on repayment of excess advance premium tax credit payments are removed. These programs are free to use through IRS.gov, and no paid middleman is required to claim them.

Frequently asked questions

Do I have to pay to open a Trump Account?

No. You can view and submit Trump Account elections through your free IRS Individual Account at IRS.gov. Official government tools never require a paid middleman.

When can the $1,000 be added to my child's account?

The IRS says Trump Accounts cannot be funded before July 4, 2026. Check IRS.gov/trumpaccounts for the latest timing.

When can my child use the money?

Generally, money cannot be withdrawn before the year the child turns 18. After that, the account is treated like a traditional IRA with similar tax rules.

Could the adoption credit give me money back even if I owe little tax?

Yes. For tax years after December 31, 2024, up to $5,000 (indexed for inflation) of the adoption credit may be refundable, which can add to your refund.