The information in this article is up to date for tax year 2025 (returns filed in 2026).
Claiming tax credits can significantly reduce your tax bill or increase your refund. Many federal tax credits are designed to help families, low-income earners, students, and others. Before filing your tax return, it’s important to understand the available tax credits so you don’t miss out on potential savings. Keep reading to learn what tax credits you may qualify for this year and how they can help.
What Is a Tax Credit?
A tax credit is a dollar-for-dollar reduction in the amount of taxes you owe. They are typically aimed at rewarding certain behaviors or offsetting specific expenses you incur during the year. For example, childcare, education, retirement savings, or purchasing an electric vehicle.
There are two main types of tax credits: refundable and nonrefundable. Nonrefundable credits can only reduce your tax liability to zero but won’t result in a refund. Refundable credits are more beneficial because they can reduce your tax bill and result in a tax refund if they exceed the amount you owe. For example, if you owe $100 and qualify for a $300 refundable credit, you could receive a $200 tax refund. A tax credit differs from a tax deduction in that it provides a direct reduction in taxes owed, while deductions reduce taxable income.
What Credits Can I Claim on My Taxes?
Here are some of the most popular tax credits you may qualify for in 2025:
1. Earned Income Tax Credit (EITC)
The Earned Income Tax Credit (EITC) is designed to assist low-to-moderate-income working individuals and families. The amount you can claim depends on your income and the number of children you claim. Here are the maximum AGI amounts for tax year 2025:
| Children Claimed | Single, Head of Household or Qualifying Widow(er) | Married Filing Jointly |
| Zero | $19,104 | $26,214 |
| One | $50,434 | $57,554 |
| Two | $57,310 | $64,430 |
| Three | $61,555 | $68,675 |
The investment income limit is $11,950 or less.
For tax year 2025, the maximum EITC amounts are:
- No children: $649
- One child: $4,328
- Two children: $7,152
- Three or more children: $8,046
2. Child Tax Credit
If you have a dependent child aged 16 or younger, you can claim the Child Tax Credit, worth up to $2,200 per child. Up to $1,700 of the credit is refundable. If your income exceeds certain limits, the credit may be reduced or eliminated.
Income limits for tax year 2025:
- $200,000 for single filers
- $400,000 for married couples filing jointly.
3. Credit for Other Dependents
This credit helps offset the cost of supporting older dependents who do not qualify for the Child Tax Credit. Worth $500 per dependent, the Credit for Other Dependents may be available for children over 16, elderly parents, or other relatives you support.
4. Child and Dependent Care Credit
If you pay for daycare or care services for a dependent child (under age 13) or a spouse/relative unable to care for themselves, you may qualify for the Child and Dependent Care Credit, also known as the dependent care credit. You can claim up to $3,000 in care expenses for one person or $6,000 for two or more dependents. The percentage you can claim varies based on your adjusted gross income (AGI).
5. Saver’s Credit
The Saver’s Credit, a type of nonrefundable credit, rewards individuals who contribute to retirement savings plans like an IRA or 401(k). Depending on your income, you can receive a credit worth 50%, 20%, or 10% of your contributions, up to $2,000 ($4,000 for joint filers).
6. American Opportunity Tax Credit
The American Opportunity Tax Credit (AOTC) is available to students in their first four years of college. The maximum credit is $2,500 per student, and as a refundable credit, if the credit exceeds your tax liability, you could receive up to $1,000 as a refund. You can claim the full credit if your modified adjusted gross income (MAGI) is $80,000 or less ($160,000 for joint filers). If your MAGI is in the $80,000-$90,000 the most you can receive is a partial credit. You can no longer claim the AOTC once your MAGI exceeds $90,000 ($180,000 for joint filers).
7. Lifetime Learning Credit
The Lifetime Learning Credit helps taxpayers pay for postsecondary education. It is worth up to $2,000 per tax return, but it phases out as your MAGI exceeds $80,000 ($160,000 for joint filers). You cannot claim the Lifetime Learning Credit once your MAGI reaches $90,000 or more ($180,000 for joint filers). This credit is ideal for individuals taking courses to improve their job skills or gain new qualifications.
Maximize your refund
Tax credits can significantly reduce your tax burden and increase your refund. The Internal Revenue Service provides guidelines and tools to help taxpayers claim all eligible credits. Make sure to research the credits available to you, especially if you’re a parent, student, or low-income earner. Many credits are designed to help with everyday expenses, education costs, and retirement savings. Be sure to use a reliable tax preparation software like ezTaxReturn to ensure you claim all the credits you qualify for and get the biggest refund possible.
Frequently Asked Questions
How do I know what tax credits I qualify for?
Eligibility depends on your income, filing status, dependents, and expenses. ezTaxReturn can help you identify every credit you’re eligible for.
What are the most common tax credits for individuals and families?
Popular credits include the Child Tax Credit, Earned Income Tax Credit (EITC), Child and Dependent Care Credit, American Opportunity Tax Credit, and Lifetime Learning Credit.
What income limits apply to tax credits?
Each credit has different income thresholds. Many benefits phase out as your adjusted gross income (AGI) rises. Check the latest IRS guidelines for current limits.
Can I qualify for multiple tax credits in the same year?
Yes. You can claim more than one credit as long as you meet each credit’s requirements. Stacking credits can significantly increase your tax refund.
Are tax credits better than tax deductions?
Often, yes. Tax credits directly reduce your tax bill dollar-for-dollar, while deductions only reduce your taxable income.
Are any tax credits refundable?
Some credits like the Earned Income Tax Credit and part of the Child Tax Credit are refundable, meaning you can get money back even if you owe zero tax.
Can college students qualify for tax credits?
Yes. Students or parents paying for education may qualify for the American Opportunity Tax Credit or Lifetime Learning Credit.
Do self-employed people qualify for tax credits?
Absolutely. Self-employed workers can claim many of the same credits, including the EITC, childcare credit, and education credits, depending on eligibility.
What documents do I need to claim tax credits?
Keep W-2s, 1099s, childcare receipts, tuition statements (Form 1098-T), health insurance forms, and any records of expenses that support your claim.
Will tax software help me find all the credits I qualify for?
Yes. Good tax software like ezTaxReturn automatically checks every IRS credit and ensures you don’t miss out on money you’re eligible for.
The articles and content published on this blog are provided for informational purposes only. The information presented is not intended to be, and should not be taken as, legal, financial, or professional advice. Readers are advised to seek appropriate professional guidance and conduct their own due diligence before making any decisions based on the information provided.
