Trump Tax Plan: Stay-at-Home Mom Tax Credit

President Trump signed the One Big Beautiful Bill Act on July 4, 2025, extending many provisions of the expiring Tax Cuts and Jobs Act while adding new measures. The legislation does not create a specific Trump stay-at-home mom tax credit, but it expands deductions and family-related tax benefits in ways that can affect households with a single income earner. These changes include adjustments to the child tax credit, dependent deductions and other credits that may indirectly support families with a parent who stays at home.

A financial advisor can help you understand how these proposed changes may affect your household. Speak with an advisor today.

Key Takeaways

• Child tax credit goes up: The credit increases to $2,200 per child in 2025, but there’s no new credit for stay-at-home parents.
• Some families get more deductions: Families may benefit from a higher standard deduction, and new tax breaks for tips, overtime and baby savings accounts.
• No tax break for caregivers: Trump’s earlier idea to give a credit to caregivers or stay-at-home parents was not included in the final law.

Trump Tax Plan: Tax Credits That May Benefit Stay-at-Home Moms

Although the One Big Beautiful Bill Act does not create a tax credit specifically for stay-at-home parents, it does include provisions that may offer financial benefits to families with a single income or a parent who stays home to care for children. Depending on household income, filing status and work arrangements, several existing tax credits under the law may still apply and help reduce a family’s overall tax burden.

Expanded Child Tax Credit

The One Big Beautiful Act raises the child tax credit (CTC) to $2,200 per qualifying child for both the 2025 and 2026 tax years. The refundable portion is worth $1,700 in 2025 and 2026.

To claim the credit, the taxpayer, their spouse (if filing jointly), and each qualifying child must have valid Social Security numbers. There are income-based phaseouts, but many families will remain eligible based on household earnings.

Check out our in-depth study to learn more about how the the One Big Beautiful Bill Act (OBBBA) impacts Americans across the country.

Earlier versions of the bill had proposed a $2,500 credit through 2028. However, the final law reduced the amount to $2,200 with inflation indexing instead of a fixed sunset schedule. No additional credit was added for stay-at-home parents or caregivers.

How This Compares to Previous Law

Under previous tax law, the Child Tax Credit is worth $2,000 per child, with $1,700 of that amount being refundable. The One Big Beautiful Act increases the total credit amount and may offer greater relief to families with little or no taxable income, a group that often includes single-income households with stay-at-home parents.

Employer-Provided Child Care Credit: Enhancement

The One Big Beautiful Bill Act expands the employer-provided child care credit, increasing incentives for businesses to offer or improve child care benefits. Employers may now claim a credit equal to 40% of qualified child care expenses, or 50% for eligible small businesses, up from the previous 25% rate. The maximum amount of eligible expenses also rises to $600,000 per year.

Although the credit is claimed by employers, it may indirectly benefit stay-at-home parents and families in several ways:

• Stronger incentives may encourage more employers to offer on-site or subsidized child care programs, expanding availability and flexibility for working households.
• Lower employer costs could translate into reduced out-of-pocket expenses for families who rely on employer-sponsored child care benefits.

How This Compares to Previous Law

Under prior law, employers could claim a 25% credit for qualified child care expenses and a 10% credit for child care resource and referral services, subject to a combined annual cap of $150,000. The updated provisions substantially increase both the credit percentage and the expense limit, strengthening incentives for employers to invest in child care infrastructure that may support working parents and those returning to the workforce.

Paid Family and Medical Leave Credit: Extension and Enhancement

The legislation also extends and revises the employer tax credit for paid family and medical leave through the 2026 tax year. ¹ Employers can continue to claim the credit for offering qualifying paid leave, whether by paying employee wages directly or covering insurance premiums that provide leave benefits.

One notable update allows employers to claim the credit even if no employees take leave during the year, as long as the business maintains a qualifying leave policy. This change is designed to encourage employers to adopt and keep compliant leave programs in place, regardless of actual usage.

Although stay-at-home parents do not receive this credit directly, broader employer participation could expand access to flexible, family-friendly work arrangements. Over time, this may make it easier for caregivers to return to the workforce through part-time, hybrid or otherwise adaptable roles that include paid leave protections.

How This Compares to Previous Law

Previously, the paid family and medical leave credit applied only when an employee actually used qualifying leave and was scheduled to expire without further extension. ² The updated law both extends the credit and broadens eligibility, increasing the likelihood that employer benefit policies may evolve in ways that affect working families.

Want to know how else the Trump Tax Plan may affect you? Read more here.

One Big Beautiful Act vs. Campaign Promises

While the One Big Beautiful Bill Act delivers several family-focused tax provisions, it stops short of introducing credits specifically for stay-at-home parents or unpaid caregivers, both of which Donald Trump had previously mentioned during his presidential campaigns.

In 2016, then-candidate Trump signaled interest in extending a child care tax deduction to stay-at-home mothers. ³ The campaign considered whether to allow mothers who care for their own kids to receive the same tax benefit as those who hire nannies or take children to daycare. One possible way of doing that was to assign a dollar value to at-home care provided by a parent. However, this proposal was never formalized.

More recently, in October 2024, Trump proposed a new tax credit for unpaid family caregivers. Speaking at a campaign event in New York, he said: “I will support a tax credit for family caregivers who take care of a parent or a loved one.” ⁴ No specific policy details or eligibility criteria were released at the time.

The One Big Beautiful Act does not contain a provision resembling this caregiver credit. Instead, it focuses on expanding general family tax relief through mechanisms like the Child Tax Credit and employer-based incentives. 

Campaign Promises vs. the One Big Beautiful Act

Flexible Savings and Family Planning Accounts

The One Big Beautiful Bill Act does not include a dedicated tax credit for stay-at-home parents, but it does expand several tax-advantaged savings options that may help families manage child-related expenses. One area of focus is the creation and promotion of baby savings accounts, which allow families to begin setting aside money for a child’s future early on. These accounts may receive preferential tax treatment, depending on how the funds are used, and can be useful for both single-income and dual-income households.

Another area where families may benefit is through expanded access to accounts like health savings accounts (HSAs) and dependent care flexible spending accounts (FSAs). These tools allow working spouses to set aside pre-tax money for qualified medical or dependent care expenses. While stay-at-home parents cannot contribute directly without earned income, the overall household can still benefit if one spouse works and uses these accounts to lower taxable income and cover family costs.

Families with only one income may also want to explore how filing status and income-splitting strategies could reduce their overall tax burden. Filing jointly may allow for better use of deductions and credits, including the expanded child tax credit. If the working spouse participates in a retirement plan or health savings program, that may also reduce taxable income, leaving more room to claim other benefits tied to income thresholds.

Although the new law does not offer a direct benefit for unpaid caregivers, it broadens the tools available to households trying to save more efficiently. For stay-at-home parents, understanding how to coordinate savings strategies with a working spouse can help stretch the household budget further and make better use of the expanded credits and deductions included in the law.

Bottom Line 

The One Big Beautiful Bill Act broadens several family-related tax provisions that may indirectly support stay-at-home parents or single-income households, but it stops short of creating caregiver-specific credits that Donald Trump referenced in earlier campaigns. The Child Tax Credit rises to $2,200 per child, and employers gain stronger incentives to offer child care assistance and paid family and medical leave. Still, the law does not provide a direct tax benefit for unpaid caregivers or full-time stay-at-home parents. Compared with prior campaign proposals that focused on explicitly recognizing in-home care through targeted credits, the final legislation takes a wider approach aimed at household-level tax relief rather than caregiver-specific support.

Tax Planning Tips

• A financial advisor can help prepare your portfolio for any tax law changes. A financial advisor can help you mitigate risk for your portfolio. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
• If you want to know how much your next tax refund or balance could be, SmartAsset’s tax return calculator can help you get an estimate.

Photo credit: ©iStock.com/scyther5, ©iStock.com/Pra-chid, ©iStock.com/Jacob Wackerhausen