10 Tax Credits You Might Be Missing (And How to Claim Them)

Credits vs Deductions: Why Credits Win

Before diving into the list, understand why credits matter more than deductions of the same amount. A $1,000 tax deduction reduces your taxable income by $1,000 — saving you $220 if you are in the 22% bracket. A $1,000 tax credit reduces your actual tax bill by $1,000 regardless of your bracket. Credits are 3–5x more valuable than deductions of the same size.

Refundable credits are even more powerful: if the credit exceeds what you owe, you receive the difference as a refund. Even with zero tax liability, a refundable credit puts money in your pocket.

Partially refundable credits are refundable up to a certain amount.

Non-refundable credits can reduce your tax to zero but you lose any excess.

1. Earned Income Tax Credit (EITC)

Potential value: Up to $7,830 (2026) | Refundable: Yes

The EITC is one of the largest anti-poverty programs in the US tax code — and one of the most frequently unclaimed. It is designed for workers with low-to-moderate income, and the credit amount increases with the number of qualifying children.

2026 approximate income limits and credit amounts:

• No children: max income ~$18,600 (single) / ~$25,500 (MFJ) | max credit ~$650
• 1 child: max income ~$49,400 (single) / ~$56,300 (MFJ) | max credit ~$4,330
• 2 children: max income ~$55,800 (single) / ~$62,700 (MFJ) | max credit ~$7,150
• 3+ children: max income ~$59,400 (single) / ~$66,300 (MFJ) | max credit ~$7,830

The IRS estimates that 20–25% of eligible taxpayers do not claim the EITC. If you had earned income (wages, self-employment) and your income is in these ranges, check your eligibility. The IRS has an online EITC Assistant tool to help you determine if you qualify.

2. Child Tax Credit

Potential value: Up to $2,000 per child | Partially refundable: Up to $1,700 per child

For each qualifying child under 17 at year-end, you can claim a credit of up to $2,000. Up to $1,700 of the credit per child is refundable (called the Additional Child Tax Credit). The credit phases out at $200,000 of modified AGI (single) or $400,000 (married filing jointly).

A qualifying child must be under 17, related to you, have lived with you for more than half the year, not have provided more than half of their own support, and have a valid Social Security number. For divorced parents, only one parent can claim the credit — typically the custodial parent.

3. Child and Dependent Care Credit

Potential value: $600–$2,100 | Refundable: No

If you pay for childcare, a daycare center, babysitter, or after-school program for a child under 13 so that you (and your spouse, if married) can work, you may qualify for this credit. You can also claim it for care of a disabled spouse or dependent.

The credit covers 20–35% of up to $3,000 in expenses for one dependent, or up to $6,000 for two or more. The percentage depends on your income — higher incomes receive a smaller percentage. Many parents who use childcare do not realize this credit exists or confuse it with the Dependent Care FSA (which is a separate, employer-provided benefit).

4. American Opportunity Tax Credit (AOTC)

Potential value: Up to $2,500 per student | Partially refundable: Up to $1,000

For students in their first four years of post-secondary education, the AOTC provides a credit of 100% of the first $2,000 in qualified education expenses plus 25% of the next $2,000, for a maximum of $2,500. Forty percent of the credit ($1,000) is refundable.

Income limits: phases out from $80,000–$90,000 (single) and $160,000–$180,000 (MFJ). The student must be enrolled at least half-time in a degree program. This credit can be claimed by the student or the parent who claims the student as a dependent — but not both.

5. Lifetime Learning Credit (LLC)

Potential value: Up to $2,000 | Refundable: No

Unlike the AOTC, the LLC applies to any post-secondary education — not just the first four years — and also covers courses to improve job skills. It covers 20% of the first $10,000 in qualified education expenses, maximum $2,000 per return (not per student). There is no limit on the number of years you can claim it.

Income limits: phases out from $80,000–$90,000 (single) and $160,000–$180,000 (MFJ). You cannot claim both the AOTC and LLC for the same student in the same year.

6. Saver's Credit

Potential value: Up to $1,000 ($2,000 for MFJ) | Refundable: No

The Saver's Credit — formally the Retirement Savings Contributions Credit — rewards low-to-moderate-income workers who save for retirement. If you contributed to a 401(k), IRA, SIMPLE IRA, SEP-IRA, or similar account, and your income is below the threshold, you receive a credit of 10%, 20%, or 50% of your contribution.

2026 income limits (approximate):

• 50% credit: Single up to $23,000 / MFJ up to $46,000
• 20% credit: Single $23,001–$25,000 / MFJ $46,001–$50,000
• 10% credit: Single $25,001–$37,500 / MFJ $50,001–$75,000

This credit is separate from and in addition to any deduction you get for the retirement contribution — meaning you get a double tax benefit. Many low-income workers who could benefit from the Saver's Credit are unaware it exists.

7. Premium Tax Credit

Potential value: Hundreds to thousands | Refundable: Yes

If you purchased health insurance through the Health Insurance Marketplace (Healthcare.gov or your state exchange) and your income falls between 100% and 400% of the federal poverty level (with no upper limit through 2025 and potentially extended), you may qualify for the Premium Tax Credit. This credit subsidizes your monthly premium — you can receive it in advance (as reduced monthly premiums) or claim it when you file.

If you received advance premium credits during the year, you must file Form 8962 to reconcile. If you received too much advance credit, you repay the difference. If you received too little, you get the rest as a refund.

8. Energy Efficiency Credits

Potential value: Up to $3,200/year | Refundable: No

The Inflation Reduction Act of 2022 significantly expanded energy tax credits for homeowners:

• Energy Efficient Home Improvement Credit: 30% of costs for qualifying improvements (insulation, windows, doors, heat pumps, heat pump water heaters, home energy audits), capped at $1,200/year for most improvements plus up to $2,000 for heat pumps. Per-item limits apply.
• Residential Clean Energy Credit: 30% of costs for solar panels, solar water heaters, wind turbines, geothermal heat pumps, battery storage, and fuel cells. No annual cap — and unused credits can carry forward to future years.

If you made any home energy improvements in 2025 or plan to in 2026, check whether the items qualify. Many homeowners who installed solar panels, new heat pumps, or energy-efficient windows do not realize they qualify for a 30% federal tax credit.

9. Electric Vehicle Tax Credit

Potential value: Up to $7,500 (new EV) or $4,000 (used EV) | Refundable: No (but may be transferred to dealer for "point-of-sale" credit)

The Clean Vehicle Credit provides up to $7,500 for qualifying new electric vehicles and up to $4,000 for qualifying used EVs. There are income limits (single filers under $150,000 for new EV; under $75,000 for used EV) and vehicle price caps ($55,000 for cars; $80,000 for trucks and SUVs). Not all EVs qualify — the vehicle must meet battery component and critical minerals requirements, and some vehicles that previously qualified have been removed from the list.

Starting in 2024, you can transfer the credit to a qualifying dealer and receive it as an instant discount at purchase — you do not have to wait until you file your taxes.

10. Adoption Tax Credit

Potential value: Up to $16,810 per child (2026) | Partially refundable for special needs adoptions

Families who adopt children can claim a credit for qualifying adoption expenses — including adoption fees, court costs, attorney fees, traveling expenses, and other costs directly related to the adoption. The maximum credit for 2026 is approximately $16,810 per child. For domestic adoptions of special needs children, you can claim the full credit even if your actual expenses were lower.

Income limits: the credit begins to phase out at modified AGI of approximately $253,000 and is fully phased out at $293,000. Unlike most non-refundable credits, unused adoption credits can be carried forward for up to 5 years.

How to Claim These Credits

Most tax software will ask you questions to identify credits you qualify for. However, software is only as good as your answers — if you do not mention that you paid for childcare, the software will not ask about the Child and Dependent Care Credit. Before you start your return, review the list above and flag every credit you might qualify for.

Key forms for common credits:

• EITC: Claimed directly on Form 1040; Schedule EIC for qualifying children
• Child Tax Credit: Form 8812
• Child and Dependent Care Credit: Form 2441
• Education credits: Form 8863
• Saver's Credit: Form 8880
• Energy credits: Form 5695
• EV credit: Form 8936

Use our federal income tax calculator to estimate your tax bill, then explore which credits can reduce it further.

Frequently Asked Questions