S. 1382 — Family First Act

This section revises the child tax credit (CTC), redesignates it as new IRC §36C in the refundable credits subpart (making it fully refundable), and permanently increases the base credit amounts to $4,200 for qualifying children under age 6 and $3,000 for other qualifying children under age 17 (from $2,000 flat for children under age 17). It establishes a phase-in of the credit from 0% to 100% for modified adjusted gross income below $20,000 (with inflation adjustments to the threshold after 2026); retains the phaseout of $50 for each $1,000 of modified adjusted gross income above $200,000 ($400,000 joint); limits the credit to six qualifying children; requires social security numbers for taxpayers, spouses, and children; excludes certain noncitizen children; and extends the credit to bona fide residents of Puerto Rico (and American Samoa if no approved plan is in place).

This section establishes a new refundable tax credit under new IRC §36D (inserted after §36C) for eligible taxpayers (i.e., the pregnant mother or her spouse filing a joint return) with a qualifying unborn child (i.e., gestational age of 20 weeks or greater, as certified by a physician), equal to the applicable percentage of $2,800. The applicable percentage is 100% if modified adjusted gross income (AGI, as defined in IRC §36C(b)(3)) is at least $10,000 (adjusted for inflation after 2026), or otherwise modified AGI divided by $10,000; the credit phases out by $50 for each $1,000 (or fraction thereof) that modified AGI exceeds $200,000 ($400,000 for joint returns). Physician certification, provided upon the mother's request and based on reasonable medical judgment, must include the child's gestational age and expected due date, the mother's (and spouse's, if applicable) name and Social Security number, the physician's contact information, and written certifications under penalty of perjury (per 28 U.S.C. §1746) from both the physician (confirming pregnancy and gestational age) and mother (confirming biological maternity or intent to bear and retain parental rights); such certification may be used solely for credit eligibility. The credit applies notwithstanding the involuntary death of the child after 20 weeks gestation, death from treatment to save the mother's life, or ectopic pregnancy treatment; applies separately to each qualifying child (including multiples or successive pregnancies in the same year); has no effect on the child tax credit under §36C after birth; and is disallowed if the child's death resulted from an induced abortion (excluding life-saving or ectopic pregnancy treatment).

This section simplifies the earned income tax credit (EIC)—a refundable tax credit for low- and moderate-income workers, with larger amounts for those with qualifying children—by consolidating schedules for taxpayers with one or more qualifying children (eliminating separate tiers for two or three or more children) and making the following changes: (1) adding a dollar cap on the credit equal to the lesser of the phaseout formula or $700-$1,400 for taxpayers without qualifying children and $4,300 (single) or $5,000 (joint) for those with one or more qualifying children; (2) in the credit percentage and phaseout percentage table, increasing the credit percentage to 25% (from 15.98%) for one or more qualifying children and the phaseout percentage to 10% (from 7.65%) for the no-children row; (3) in the earned income amount and phaseout amount table, increasing amounts for one or more qualifying children to $12,647 (from $6,330) earned income and $33,000 (from $11,610) phaseout, and for no qualifying children to $9,150 (from $4,220) earned income and $10,000 (from $5,280) phaseout; and (4) for joint returns, increasing the phaseout offset to $10,000 (from $5,000) and adding earned income increases of $2,059 for taxpayers with one or more qualifying children or $9,151 for those without, with inflation adjustments based on calendar year 2025 (chained to 2026, from 2015/2016). The changes apply to taxable years beginning after December 31, 2025, but prior-law EIC rules apply to exempted children (i.e., children qualifying under special dependency rules in IRC §152(c)(3)(A)(ii) or (B)), with separate application if a taxpayer has both exempted and non-exempted qualifying children.

This section eliminates the additional personal exemption deduction for dependents by setting the exemption amount to zero under IRC §151(c) for taxable years beginning after December 31, 2025 (from the amount otherwise applicable under §151(a), suspended through 2025 by the Tax Cuts and Jobs Act of 2017). (Thus, taxpayers may not claim this deduction for dependents beginning in 2026, though the provision clarifies that this change does not affect determinations of deduction allowability under other IRC §151 provisions.)

This section eliminates the head of household filing status under Section 1 of the Internal Revenue Code—previously available to unmarried taxpayers who pay more than half the cost of maintaining a household for a qualifying child or dependent—for taxable years beginning after December 31, 2025. It makes conforming amendments to over a dozen related provisions, including (1) halving applicable percentage amounts and income phaseouts for non-joint filers under the Saver's Credit (Sec. 25B), (2) reducing modified adjusted gross income thresholds to $75,000 for non-joint filers under the previously-owned clean vehicle credit (Sec. 25E) and $150,000 under the new clean vehicle credit (Sec. 30D), (3) removing head of household references from premium tax credit eligibility (Sec. 36B), and (4) substituting $12,000 for $3,000 as the additional standard deduction amount for certain dependents (Sec. 63(c)(7)(A)). (Thus, former head of household filers revert to single status brackets and deductions, which are narrower and lower than head of household amounts.)

This section revises the child and dependent care tax credit under IRC §21 (which provides a nonrefundable credit of up to 35% of qualifying employment-related expenses, capped at $3,000 for one qualifying individual or $6,000 for two or more) by (1) eliminating children under age 13 as qualifying individuals, (2) limiting qualifying dependents or spouses physically or mentally incapable of self-care to those who have attained age 17 (previously, no minimum age), and (3) requiring that expenses for care outside the taxpayer's household be incurred for a qualifying individual who regularly spends at least 8 hours each day in the taxpayer's household (previously, such outside care was permitted for children under age 13). It makes conforming changes to cross-references and special rules. The amendments apply to taxable years beginning after December 31, 2025.

This section denies individuals a deduction for state and local taxes—specifically, real property taxes, personal property taxes, income taxes, and general sales taxes—for taxable years beginning after December 31, 2025 (replacing the current $10,000 cap ($5,000 for married individuals filing separately) under IRC §164(b)(6)). The denial does not apply to foreign taxes or to domestic real property and personal property taxes paid or accrued in carrying on a trade or business or an investment activity under IRC §212. Amounts paid before January 1, 2026, for state or local income taxes imposed for taxable years beginning after December 31, 2025, are treated as paid on the last day of the taxable year for which imposed.