A Tax Policy Center (TPC) analysis of the proposed Family First Act (FFA) finds the legislation would reduce taxes for most families with children and married couples while raising taxes for many single parents, at an estimated cost of about $150 billion over 10 years.
Background
The FFA, introduced last year as H.R. 353 by Representative Blake Moore (R-UT) and as a companion bill, S. 1382, by Senator Jim Banks (R-IN), would make broad changes to family tax benefits beginning in 2026. The bill’s primary feature is an expanded Child Tax Credit (CTC) of $4,200 per child under age 6 and $3,000 per child age 6 to 17, covering up to six children per family, made fully refundable. The FFA would also create a new refundable credit of up to $2,800 for pregnant mothers with a qualifying unborn child, defined as a fetus with a gestational age of 20 weeks or greater.
To help offset those costs, the bill would restructure the earned income tax credit (EITC) for families with children under 19, applying a single credit formula regardless of the number of children. It would also eliminate head of household (HOH) filing status, repeal the Child and Dependent Care Tax Credit (CDCTC) for children under age 13 and the $500 credit for other dependents, and make the $10,000 cap on the state and local tax (SALT) deduction permanent beginning in 2026.
Overall Distributional Effects
The TPC report, published May 1, estimates that among all families with children, about 62% would see a net tax reduction and 32% would face a higher tax bill. Families receiving a tax cut would see an average benefit of about $2,100, while those facing an increase would pay about $1,700 more on average. The findings were compiled by Principal Research Associate Margot Crandall-Hollick and Senior Fellow Elaine Maag.
Nearly three-quarters of families with children in the lowest 20% of the income distribution would see their after-tax income increase. The top income quintile is the only group for which the FFA would produce an average net loss, the TPC found, because higher-income families are less likely to benefit from the expanded CTC and more likely to be affected by the SALT cap. Among families with children in the lowest income quintile who would see their after-tax incomes fall, more than 9 in 10 are unmarried. Middle- and upper-income families with children would also see average tax bill increases from the elimination of the CDCTC.
The CTC expansion accounts for the largest portion of the bill’s gross cost, at about $687 billion over 10 years before offsets. Eliminating HOH filing status and making the SALT cap permanent are the two largest revenue offsets, generating about $313 billion and $150 billion in savings, respectively. Without those two provisions, the TPC estimates the bill’s 10-year cost would increase fourfold to more than $600 billion.
Effects by Marital Status
The FFA’s effects differ significantly by marital status. A larger share of married parents, 68%, would see a tax reduction compared with 55% of unmarried parents. Among married parents receiving a benefit, the average increase in after-tax income would be about $2,500; among unmarried parents receiving a benefit, the average would be about $1,700.
The TPC identifies the elimination of HOH filing status as the key driver of that gap. Under current law, unmarried taxpayers who maintain a home for themselves and their children can use HOH status, which provides a higher standard deduction and more favorable tax brackets than filing as single. The FFA would require those taxpayers to file as single, increasing their tax liability in many cases by more than any gain from the expanded CTC.
The TPC modeled a single parent with two children ages 6 to 17 earning $25,000. Under current law, that taxpayer would owe about $85 before credits and be eligible for a combined CTC and EITC of about $10,500. Under the FFA, those combined credits would remain near about $10,300, but the loss of HOH status would result in about $890 in pre-credit tax liability, leaving their after-tax income about $1,000 lower, the TPC found.
The EITC restructuring would also reduce benefits for some lower-income families. Under the FFA, the maximum EITC for a single parent with children under 19 would be $4,300, compared with up to $8,231 for a family with three or more qualifying children under current law. Overall, about 41% of unmarried taxpayers with children would see their after-tax incomes decrease under the FFA, compared with about 24% of married taxpayers with children.
For more on Child Tax Credit amounts for qualifying children under current law, see Checkpoint’s Federal Tax Coordinator 2d ¶ A-4052.
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