H.R. 9426: Affordable Youth Enrichment Opportunities Act

This bill would create a new federal income tax deduction for certain out-of-pocket costs that parents or other taxpayers pay for children’s extracurricular and enrichment activities.

What the deduction covers

The bill defines qualified youth program expenditures as amounts paid for a dependent under age 19 to մասնակցate in a qualified youth program. Eligible expenses can include:

• fees for tutoring or academic enrichment programs;
• fees for athletic programs, practices, competitions, training, or skills development;
• fees for arts programs, including instruction, rehearsals, and performances;
• equipment, training, digital platforms, or other related costs tied to participation;
• other youth enrichment programs that the Treasury Secretary, working with the Education Secretary, decides qualify.

How much can be deducted

A taxpayer could deduct up to $5,000 per year for these expenses.

Who could claim it

The deduction would be limited by income. No deduction would be allowed if the taxpayer’s modified adjusted gross income is above:

• $200,000 for married couples filing jointly and surviving spouses;
• $150,000 for heads of household;
• $100,000 for other taxpayers.

Also, the deduction could not be claimed for a person who is someone else’s dependent for tax purposes. In other words, the child or dependent benefiting from the program cannot be the one taking the deduction if another taxpayer is already claiming them as a dependent.

Other limits

The bill says the new deduction cannot be used for any expense that is already deductible under another part of the tax code. This prevents the same expense from being deducted twice.

Inflation adjustment

Starting after 2027, both the $5,000 deduction cap and the income thresholds would be adjusted for inflation each year, with amounts rounded down to the nearest $100.

When it would take effect

The change would apply to taxable years beginning after December 31, 2026.

Relevant Companies

None found