By ProTaxMasters

5 Things New Parents in Texas Need to Know Before 2027 (Including the $1,000 Trump Account)

1. The $1,000 "Trump Account" (Form 4547)

One of the biggest new items for growing families is the $1,000 "Trump Account" tied to Form 4547. This is not a tax credit. Instead, it is a one-time $1,000 government seed contribution deposited into a child's Trump Account, which works like a custodial-style traditional IRA for the child and is administered by the Treasury.

Here is the simple version:

1. The child must be a U.S. citizen.
2. The child must be born between January 1, 2025, and December 31, 2028.
3. Parents can claim it by filing Form 4547 or by using trumpaccounts.gov.
4. The money is deposited into the child's account and invested in a low-cost index fund.
5. Because it is a traditional IRA-style account, the money is generally taxable when withdrawn later.

For Texas families, the key is making sure the birth records, Social Security information, and filing details all match up correctly. Small mistakes can slow things down.

2. The Increased Child Tax Credit (CTC)

Right now, we want to stick with what is actually on the books. For the current 2025 tax year, the Child Tax Credit is worth up to $2,200 per qualifying child. That part is generally non-refundable.

There is also the Additional Child Tax Credit, which is the refundable portion. That amount is up to $1,700 per child, depending on income. To qualify for the refundable portion, you generally must have at least $2,500 in earned income.

Here are the main rules parents should know:

1. Your child must be under age 17 at the end of the tax year.
2. Your qualifying child must have a valid Social Security number.
3. Income phaseout begins at $200,000 for most filers and $400,000 for married couples filing jointly.
4. If you want the Additional Child Tax Credit, you generally need at least $2,500 in earned income.

For Texas families, this still matters a lot. Even though the numbers are not as large as many headlines suggest, these credits can still help with groceries, school needs, childcare, and day-to-day family expenses.

The biggest issue we see is that many parents hear about the credit, but they are not sure:

1. If their child qualifies
2. Which records they need to keep
3. How the refundable portion works
4. How to claim the credit the right way

The One Big Beautiful Bill Act may affect future years if its provisions are passed, extended, or expanded. If that happens, we will update this guide. But for now, we work with what is currently on the books.

That is where simple, proactive tax planning can make life much easier.

3. Employer Credit Incentives

If you own a business and have employees, there may be opportunities here for you too. This section matters for employers who want to support working parents while also using available tax breaks the right way.

Here are three areas to watch:

1. Employer-provided childcare assistance credits
   If your business helps employees with childcare costs, there may be tax benefits tied to that support.

2. Work Opportunity Tax Credit
   In some cases, this credit may apply when hiring workers from qualifying groups, including certain parents returning to the workforce depending on the facts and eligibility rules.

3. Employer-Provided Childcare Credit (Form 8882)
   If your business pays for childcare help or childcare facilities, Form 8882 may come into play.

For small business owners, this is where Small Business Advisory Services can really help. We can walk through whether the benefit is worth the setup, paperwork, and ongoing cost before you move forward.

4. More Help with Daycare Costs

If you are a working parent, you know that daycare can sometimes feel like a second mortgage. The tax code is finally catching up.

For 2026, the Dependent Care FSA limit has increased to $7,500. This allows you to set aside $7,500 of your paycheck before taxes are taken out to pay for childcare. On top of that, the credit rate for these expenses has been boosted up to 50% in certain cases.

This is a huge win for "the little guy": the small business owners and hardworking parents who are just trying to balance a career and a family.

5. 529 to Roth IRA Rollovers & The Adoption Tax Credit

There is also good news for families thinking long-term.

If you have money in a 529 plan, there may now be more flexibility later through 529-to-Roth IRA rollover rules for eligible situations. That can be helpful if education plans change over time and you want to preserve value instead of feeling boxed in.

If you are growing your family through adoption, there is specialized support for you too. The Adoption Tax Credit is now partially refundable, up to $5,000.

Adoption is a beautiful but expensive process. This credit acts as a "Strategic Shield" to help offset those costs so you can focus on welcoming your newest family member.

Planning for the Future: Wealth Preservation

While you are focused on diapers and daycare, we are focused on your long-term legacy. As part of our Strategic Tax Planning & Wealth Preservation services, we want you to be aware of the 2026 limits:

• Annual Gift Exclusion: You can give up to $19,000 (as an individual) or $38,000 (as a married couple) to your child each year without any tax reporting.
• Federal Exemption: The federal estate tax exemption is currently up to $15 million per individual ($30 million for married couples).

Also, for those of you running your own small business while raising a family, remember that under the One Big Beautiful Bill Act, bonus depreciation for the 2026 tax year is set at 100%. This means you can deduct the full cost of qualifying equipment or assets in the first year, providing immediate cash flow for your business and your family.

Let Us Be Your Strategic Shield

At ProTaxMasters, we believe you shouldn't have to be a tax expert to benefit from the tax code. Michael Garcia is an AFSP participant, an EA candidate, and has been serving the San Marcos community since 2018. As a Texas Notary Public, he understands the importance of getting the details right the first time.

Navigating things like the Form 4547 for the Trump Account or maximizing your S-Corp optimization requires a cost-benefit analysis that we handle for you. We provide the peace of mind you need so you can spend more time with your kids and less time with your calculator.

Want us to help you claim available tax benefits and set up your Legacy Starter Kit? We handle all the paperwork for you.

Give us a call today at (512) 537-4170 or visit us at www.protaxmasters.com.

Official Legal Disclaimer:

IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

FinCEN BOI Disclosure: Under the March 26, 2025 Interim Final Rule, all domestic U.S. entities and U.S. persons are currently exempt from Beneficial Ownership Information (BOI) reporting. Only foreign-formed entities registered to do business in the U.S. may still have reporting obligations. While the Eleventh Circuit upheld the Corporate Transparency Act's constitutionality in December 2025, the domestic exemption remains in effect unless a final rule states otherwise.

Bonus Depreciation: As per the One Big Beautiful Bill Act (OBBBA), bonus depreciation for the 2026 tax year is set at 100% and is not subject to a phase-out schedule.

Notary Policy: Michael Garcia (Owner) does not notarize any tax documents he has personally prepared, in accordance with IRS Circular 230 and Texas state law.

No Professional-Client Relationship: The information provided in this blog post is for general informational purposes only and does not constitute professional tax, legal, or financial advice. Accessing or reading this post does not create a professional-client relationship between the reader and ProTaxMasters.