What New Parents Need to Know About Filing Taxes in 2026

Does a New Baby Mean a New Exemption?

No, having a baby doesn't mean you claim a new exemption. Before 2017, a new baby did mean a new tax deduction. Not so today. The Tax Cuts and Jobs Act of 2017 eliminated personal exemptions, replacing them with larger standard deductions. This change was made permanent with the passage of the One Big Beautiful Bill Act in July 2025.

Long story short: Adding a baby to your household doesn't add a new standalone tax deduction, though becoming a new parent may offer other tax benefits.

Will Your Filing Status Change?

If you're married, your filing status doesn't change with the birth or adoption of a child. However, if you aren't married, having a baby could change your filing status from single to head of household. Filing as head of household allows you to claim a higher standard deduction, which can lower your taxable income and save you money. Claiming head of household requires you to have at least one qualifying dependent, which is how your new bundle of joy might change your tax status.

Here's how standard deductions compare in 2025 and 2026.

Source: IRS

Additionally, head of household status gives you more favorable tax brackets, which can help save even more on taxes.

If you aren't married to your child's other parent, only one of you may claim the child. The IRS has an interactive assistant to help determine which parent claims a dependent child.

Learn more: Standard vs. Itemized Deductions: Which Saves You Money?

Can You Claim Tax Credits?

As a new parent, you also may be eligible for tax credits that lower your tax bill dollar for dollar. The following tax credits apply to families with children ages 17 and younger, adoptive parents, parents who pay for child care, and low- or moderate-income families in need of a tax break.

Child Tax Credit

The child tax credit provides up to $2,200 in federal tax credits for each qualifying child you claim on your tax return. To qualify for the full $2,200 credit, your annual income must be $200,000 or less ($400,000 if married filing jointly).

Up to $1,700 of your credit may be refundable, meaning that you may receive up to $1,700 back as a refund if your tax credit is greater than the total tax you owe. To qualify, your child must have a Social Security number, be under age 17 and be claimed as a dependent on your tax return.

Adoption Credit

A federal adoption tax credit can help new parents defray the considerable costs of adopting a child. The adoption tax credit covers qualified adoption expenses, including adoption fees, court and attorney fees, travel expenses and other direct expenses up to $17,280 per child in 2025 and $17,670 in 2026. Starting in 2025, the adoption tax credit is also partially refundable, up to $5,000.

Learn more: Refundable vs. Nonrefundable Tax Credits

Child and Dependent Care Credit

The child and dependent care credit provides a nonrefundable tax credit for care costs you incur so you can work, look for work or attend school. Currently, you can claim a credit of 20% to 35% of up to $3,000 in qualifying expenses for one dependent or up to $6,000 for two or more dependents. See IRS Publication 503 for full details on calculating your credit.

Earned Income Tax Credit

Adding a dependent to your household may help you qualify for the earned income tax credit (EITC). The EITC is a refundable tax credit that gives a bit of tax relief to low- and moderate-income taxpayers. Eligibility is determined by income, household size and tax filing status.

The amount of EITC you're eligible to claim varies widely, so be prepared to do some math if you want to claim the credit. To see whether or not you may qualify at all, here are the EITC maximum credits as well as the top incomes you can earn and still claim any EITC for 2025 and 2026.

• 2025 Earned Income Tax Credit
• 2026 Earned Income Tax Credit

Source: IRS

5 Things to Do to File Your Taxes as a New Parent

Filing taxes as a new parent isn't radically different, but it does entail some extra work. To get ready for your first tax season as a parent, start early and take these five basic steps.

1. Get a Social Security Number

Your child needs a Social Security number so you can claim them as a dependent on your tax return, claim the child tax credit or EITC, and eventually open bank accounts in their name. You can apply for a Social Security number for your baby at the same time you submit birth certificate paperwork in the hospital, according to the Social Security Administration. If this didn't happen, you can start an application online at SocialSecurity.gov and complete the process at your local Social Security office.

2. Keep Good Records

Start off on the right foot by keeping good records of your tax-related expenses. If you decide to fund a flexible spending account (FSA) through your employer, be prepared to document your qualifying expenses throughout the year. The same applies if you plan to claim the child and dependent care credit.

You may also want to save receipts and records for prenatal care, hospital care and postnatal or pediatric care. If your out-of-pocket medical costs exceed 7.5% of your adjusted gross income and you itemize, you may be able to deduct some of your medical expenses on your tax return.

3. Find Deductions and Credits

Your filing status and eligibility for deductions and credits may have changed. Take stock of the following basics:

• Your filing status
• Your standard deduction
• Itemized deductions (child-related and not)
• Refundable and nonrefundable tax credits

Tax preparation software includes questionnaires that help you zero in on potential deductions and credits. Or, consider working with a tax pro who can help you find the tax benefits you're eligible to claim.

4. Consider Tax-Advantaged Accounts

If your baby is receiving cash gifts you'd like to set aside for their future education, consider opening a 529 plan. Some states offer state income tax deductions or tax credits for 529 plan contributions, and withdrawals are federal tax-free as long as you use the money to pay for qualifying college or K-12 education expenses.

Because child care and health care expenses add up, you may benefit from setting aside pretax dollars using an FSA or employer-based child care subsidies. Check with your employer's benefits administrator to learn more.

5. Adjust Your Withholding

Your tax liability is likely to change with the arrival of a new baby. Consider adjusting your withholding when your baby is born so the amount you're setting aside reflects your new tax reality. If you aren't sure how your taxes are going to change, you can wait to change your withholding until after you've completed your tax return.

The Bottom Line

It's OK to simplify your approach if tax-related tasks feel overwhelming. Focus on the essentials: Get a Social Security number for your baby, check your eligibility for the child tax credit and designate a safe place to keep tax records.

Also think about getting a little support. This could be a great time to meet with a tax advisor. They can help you identify potential credits and deductions, let you know which records to keep (and which ones to forget about) and offer tax planning suggestions that help ensure that you're not missing out on key tax benefits, this year and down the road.