HR353-119

What This Bill Does

The Family First Act is a major family tax bill. It rewrites the child tax credit to provide a base credit of $4,200 for each qualifying child under age 6 and $3,000 for each other qualifying child, with the applicable percentage phasing in through $20,000 of modified adjusted gross income and phasing out by $50 per $1,000 above $400,000 for joint filers or $200,000 for others. The $20,000 phase-in amount is indexed after 2026. It creates a new $2,800 credit for pregnant mothers with a qualifying unborn child whose gestational age is 20 weeks or greater, certified by a physician, with a $10,000 income phase-in, the same $400,000 and $200,000 phaseouts, and post-2026 indexing. It simplifies the EITC for taxpayers with children by collapsing child-count categories into one qualifying-child category, setting a 25 percent credit percentage, changing phaseout and earned-income amounts, and capping the credit at $4,300 for nonjoint filers with children and $5,000 for joint filers with children. It eliminates the dependent exemption amount after 2025, eliminates head-of-household filing status and conforming references across credits, excludes children from the child and dependent care employment-expense credit, and extends the individual state and local tax deduction limitation after 2025.

Who Benefits and How

Families with children under age 6 benefit from a $4,200 child tax credit base amount. Families with older qualifying children benefit from a $3,000 child tax credit base amount. Pregnant taxpayers benefit from a new $2,800 credit for a physician-certified qualifying unborn child at 20 weeks or greater. Low-income workers with children benefit from a simplified EITC structure and larger child-worker caps. Some married families benefit if the child tax credit and EITC expansions outweigh lost filing-status or deduction benefits.

Who Bears the Burden and How

Heads of household lose a separate filing status after 2025. Families using child care for children lose child eligibility under the dependent care employment-expense credit. High-SALT taxpayers continue to face the individual SALT deduction limitation after 2025. IRS tax administration staff must implement new credits, pregnancy certification rules, EITC tables, filing-status changes, and conforming amendments. Federal revenue falls from larger child and pregnancy credits but rises from eliminated or limited deductions and filing benefits.

Key Provisions

• Expands the child tax credit to $4,200 for children under age 6 and $3,000 for other qualifying children.
• Creates a $2,800 credit for pregnant mothers with physician-certified unborn children at 20 weeks or greater.
• Simplifies the EITC for taxpayers with children and sets new credit caps for joint and nonjoint filers.
• Eliminates the dependent exemption amount after 2025.
• Eliminates head-of-household filing status and conforming references.
• Excludes children from the dependent care employment-expense credit.
• Extends the individual state and local tax deduction limitation after 2025.