What Credits Can I Claim on My Taxes?

Tax credits can reduce the amount owed to the IRS and, in some cases, result in a refund. Unlike deductions, which lower taxable income, tax credits provide a dollar-for-dollar reduction of tax liability, making them especially valuable for maximizing savings.

Understanding which credits you qualify for can help you keep more of your earnings and take advantage of financial incentives designed to support families, education, retirement savings, and other essential expenses.

Earned Income Tax Credit

The Earned Income Tax Credit (EITC) benefits low- to moderate-income workers by reducing their tax liability and often providing a refund. Eligibility depends on income, filing status, and the number of qualifying dependents. For 2024, the maximum credit is $632 for taxpayers without children and up to $7,830 for those with three or more qualifying children. Married couples filing jointly must have an income below $66,819 to qualify.

Eligible taxpayers must have earned income from wages, salaries, or self-employment. Investment income must be under $11,600 for the year. Those filing as “married filing separately” are generally ineligible, though exceptions exist for certain victims of domestic abuse or spousal abandonment.

Filing errors, such as misreporting income or claiming ineligible dependents, are common. The IRS closely examines EITC claims, and incorrect filings can lead to audits, penalties, or a ban from claiming the credit in future years. Taxpayers should verify their eligibility using IRS tools or consult a tax professional.

Child Tax Credit

The Child Tax Credit (CTC) helps families offset the costs of raising children. For 2024, the credit is worth up to $2,000 per qualifying child under 17, with up to $1,600 refundable through the Additional Child Tax Credit (ACTC). This allows even taxpayers with no tax liability to receive part of the credit as a refund.

To qualify, the child must be under 17, have a valid Social Security number, and live with the taxpayer for more than half the year. The credit begins to phase out for single filers earning over $200,000 and married couples filing jointly with incomes above $400,000, reducing by $50 for every $1,000 over these thresholds.

For example, a married couple earning $420,000 would see their credit reduced by $1,000, leaving them with $1,000 per child instead of the full $2,000. To receive the refundable portion, taxpayers must have at least $2,500 in earned income.

Child and Dependent Care Credit

The Child and Dependent Care Credit helps taxpayers cover the cost of child or dependent care, allowing them to work or look for work. This credit applies to expenses for a qualifying child under 13 or a dependent unable to care for themselves.

For 2024, taxpayers can claim up to 35% of qualifying care expenses, with a maximum of $3,000 for one dependent and $6,000 for two or more. The highest credit is $1,050 for one dependent and $2,100 for two or more. The percentage decreases for those earning more than $15,000, bottoming out at 20% for incomes above $43,000.

Only expenses for services that enable the taxpayer to work—such as daycare, babysitters, or in-home caregivers—qualify. Payments to a spouse, the child’s other parent, or a dependent do not count.

To claim the credit, taxpayers must provide the care provider’s name, address, and Taxpayer Identification Number (TIN). Those using a dependent care Flexible Spending Account (FSA) must subtract any employer-provided benefits from their eligible expenses. For example, if a taxpayer has $5,000 in a dependent care FSA, only $1,000 of additional expenses would qualify for the credit.

Education Credits

Higher education costs can be offset by tax credits. The two primary options are the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC). The AOTC provides up to $2,500 per eligible student for the first four years of postsecondary education, with up to $1,000 refundable. The LLC offers up to $2,000 per tax return for tuition and fees at any stage of higher education but is nonrefundable, meaning it can only reduce tax liability to zero.

The AOTC requires at least half-time enrollment in a degree or credential program, while the LLC is available to part-time students and those taking courses to improve job skills. Income limits apply, with phaseouts beginning at $80,000 for single filers and $160,000 for joint filers in 2024. Those earning more than $90,000 (single) or $180,000 (joint) are ineligible.

Retirement Savings Contributions Credit

The Retirement Savings Contributions Credit, or Saver’s Credit, encourages low- and moderate-income taxpayers to contribute to retirement accounts. This credit applies to contributions to traditional or Roth IRAs, 401(k) plans, 403(b) plans, and similar accounts.

The credit covers up to 50% of the first $2,000 contributed ($4,000 for married couples filing jointly), with a maximum value of $1,000 per taxpayer. The percentage depends on adjusted gross income (AGI). For 2024, single filers earning $21,750 or less qualify for the full 50%, while those earning up to $36,500 receive a reduced percentage. Married couples filing jointly can earn up to $73,000 and still claim a partial credit.

Taxpayers who are full-time students or claimed as dependents on another return are ineligible. Contributions must be made by the tax filing deadline, typically April 15, and rollovers do not count.

Adoption Credit

The Adoption Credit helps offset adoption-related expenses, including adoption fees, court costs, attorney fees, and travel expenses. This nonrefundable credit can be carried forward for up to five years if it exceeds tax liability.

For 2024, the maximum credit is $16,810 per adopted child. The credit begins to phase out for taxpayers with a modified adjusted gross income (MAGI) above $252,150 and is eliminated at $292,150. Adoptions of children with special needs automatically qualify for the full credit, regardless of actual expenses.

Employer-provided adoption assistance may also be excluded from taxable income, but taxpayers cannot claim both the credit and the exclusion for the same expenses.

Health Coverage Tax Credit

The Health Coverage Tax Credit (HCTC) helps certain individuals cover health insurance premiums. This refundable credit is available to workers receiving Trade Adjustment Assistance (TAA) benefits or Pension Benefit Guaranty Corporation (PBGC) payments due to a failed pension plan.

The credit covers 72.5% of qualified health insurance premiums. Eligible plans include COBRA continuation coverage, individual market plans, and certain employer-sponsored retiree health plans. However, marketplace plans purchased through the Affordable Care Act (ACA) exchanges do not qualify.

Taxpayers can claim the credit when filing their return or receive advance monthly payments to help cover premiums throughout the year. Enrollment in the advance payment program requires submitting IRS Form 13441-A and proof of eligibility.

Energy-Efficient Improvements Credit

Homeowners making energy-efficient upgrades can benefit from two tax credits: the Energy Efficient Home Improvement Credit and the Residential Clean Energy Credit.

The Energy Efficient Home Improvement Credit covers 30% of the cost of eligible improvements, with annual limits. For 2024, the maximum credit is $1,200, with sub-limits of $600 for windows, $500 for doors, and $150 for home energy audits. Heat pumps, biomass stoves, and central air conditioners qualify for an increased limit of $2,000. Improvements must meet energy efficiency standards set by the Department of Energy.

The Residential Clean Energy Credit applies to larger renewable energy investments, such as solar panels, wind turbines, and geothermal heat pumps. This credit covers 30% of installation costs with no annual cap. Unlike the home improvement credit, it applies to both primary and secondary residences, and any unused portion can be carried forward to future tax years. To qualify, systems must be installed in the taxpayer’s home and meet applicable energy efficiency standards.