First-Time Parents Tax Credit Act

The First-Time Parents Tax Credit Act would create a new refundable tax credit under the Internal Revenue Code to support families with newborns or newly adopted children. For each eligible new parent, the credit would be $1,250, with a joint return allowing $2,500 if there are two eligible new parents. The credit is available for taxable years starting after December 31, 2025. An “eligible new parent” must not have claimed the credit in a prior year and must be either the parent of a qualifying child born or adopted in the current tax year, or the non-custodial parent of a child born or adopted in the year immediately before the current year. The bill also clarifies who qualifies as a non-custodial parent and makes necessary conforming changes to the tax code and related procedural provisions to implement the credit. In short, the act would provide a straightforward cash-back-type tax benefit to new parents (and, in some cases, to both parents on a joint return), aimed at offsetting costs associated with adding a child to the household.