For a lot of families, it can feel like money is constantly going out the door. Childcare, school, diapers, activities. As a financial advisor in Lexington, Kentucky, I cover this week three credits the One Big Beautiful Bill Act just enhanced to put more money back in the hands of families.

The Child Tax Credit, the Child and Dependent Care Credit, and the Adoption Credit. All three were changed under the new law. All three matter for families right now.

This is week six of our OBBBA series on The Groundwork.

WHAT YOU'LL LEARN

Child Tax Credit

•      The credit was set to expire at the end of 2025. Instead of disappearing, it got bigger.

•      Increased from $2,000 to $2,200 per child starting in 2025, with future increases indexed to inflation

•      The refundable portion (Additional Child Tax Credit) increases from $1,400 to $1,700 per child. This is the piece that can come back as an actual refund even if you don't owe taxes. It will also increase annually.

•      The refundable piece matters most for low and middle income families. If your credit is larger than your tax bill, you can still receive the difference back.

•      Phase-out starts at $200,000 for single filers, $400,000 for married filing jointly

•      If you have children under 17 and fall below those thresholds, you're getting more back automatically. No extra steps required.

Child and Dependent Care Credit

•      The expense limits did not change: up to $3,000 for one qualifying child, $6,000 for two or more

•      What changed: the maximum credit rate increased from 35% to 50% of qualifying expenses

•      Maximum credit goes from $2,100 to $3,000 for families with two or more children

•      The households that benefit most have AGI of roughly $30,000 to $100,000

•      Important: this credit is non-refundable. It can reduce your tax bill to zero, but it cannot create a refund. If you don't owe enough to use the full credit, you won't get the remainder back.

•      The dependent care exclusion for employer-sponsored childcare benefits increases from $5,000 to $7,500 for married filing jointly. If your employer offers a Dependent Care FSA, the amount you can set aside tax-free just increased.

Adoption Credit

•      For the first time, the adoption credit is now partially refundable

•      Previously: entirely non-refundable. Could reduce what you owed, but if your tax liability was not large enough, the remainder was lost.

•      Under the new law: up to $5,000 of adoption expenses can now come back as an actual refund on your return, even if you don't have enough tax liability to use the full credit

•      Qualifying expenses: legal fees, agency fees, court costs, travel

•      The refundable piece provides relief in a way the old credit simply didn't

•      If you are in the adoption process now or planning to be, track every qualifying expense and make sure whoever prepares your return knows about this change

Raising children, paying for childcare, or growing your family through adoption? These credits may affect your return.

Whether you are a family in Lexington navigating childcare costs, a couple considering adoption, or simply trying to understand what these changes mean for your specific situation, I would be glad and honored to sit down with you and work through it.