What tax credits are available for 2025

Tax credits reduce the amount of tax you owe to the federal government, dollar for dollar. Unlike deductions, which lower your taxable income, a credit directly cuts your tax bill. The credits available in 2025 depend on your income, family size, work status, and what you spent money on during the year. Some credits are refundable, meaning you get money back even if you owe no tax; others reduce your bill to zero but do not pay you beyond that.

The largest credits for most households are the Child Tax Credit, the Earned Income Tax Credit (EITC), and the Child and Dependent Care Credit. Smaller credits exist for education, energy-efficient home improvements, electric vehicles, and retirement savings. The IRS publishes the full list each year, and amounts change based on inflation and congressional action.

Key Takeaways

  • The Child Tax Credit is worth up to $2,000 per child under 17 and is refundable up to $1,700 per child in 2025.
  • The Earned Income Tax Credit ranges from $560 to $3,995 depending on income and family size, and is fully refundable.
  • Education credits like the American Opportunity Credit cover tuition and fees up to $2,500 per student per year.
  • Energy and home improvement credits cover solar panels, heat pumps, and other efficiency upgrades, with no income limit on some of them.
  • You claim credits on your tax return using IRS forms and schedules; the IRS does not notify you which ones you may claim.

Child Tax Credit and Additional Child Tax Credit

The Child Tax Credit is $2,000 per child under age 17 as of December 31, 2025. To claim it, the child must be your son, daughter, stepchild, foster child, sibling, or descendant of any of these, and you must provide their Social Security number. The child must live with you for more than half the year and be a U.S. citizen, national, or resident alien.

The credit begins to phase out if your modified adjusted gross income (MAGI) exceeds $400,000 for married couples filing jointly or $200,000 for single filers. For every $1,000 over the threshold, you lose $50 of the credit.

The Additional Child Tax Credit (also called the refundable portion) lets you claim back up to $1,700 per child in 2025, even if you owe no tax. To claim this refundable portion, you must have earned income during the year. You report the Child Tax Credit on Schedule 8812 if you are claiming the refundable portion.

Earned Income Tax Credit (EITC)

The EITC is a refundable credit for workers with low to moderate income. The amount depends on how much you earned, whether you have children, and your filing status. In 2025, the maximum credit ranges from $560 for a single worker with no children to $3,995 for a married couple filing jointly with three or more children.

You do not have to have children to claim the EITC, but the credit is larger if you do. The credit phases out as income rises, so there is a range of income where you may have access to. For example, a single filer with one child may claim the credit if their MAGI is below $46,560 in 2025, but the credit amount peaks at a lower income level and then shrinks as you earn more.

The EITC is fully refundable, meaning if the credit is larger than your tax bill, the IRS sends you the difference. You claim it on Schedule EIC (Form 1040) or through your tax software. Many people claim the EITC without realizing they may have access to, so it is worth checking if your income is in the range.

Education Credits: American Opportunity and Lifetime Learning

The American Opportunity Credit covers tuition, fees, and course materials for the first four years of college or university. The maximum credit is $2,500 per student per year. You can claim it for yourself, your spouse, or your dependent if they are enrolled at least half-time in a degree or certificate program.

The credit is partially refundable: up to $1,000 of the $2,500 can be refunded to you even if you owe no tax. Your MAGI must be below $80,000 for single filers or $160,000 for married couples filing jointly to claim the full credit; it phases out above those amounts.

The Lifetime Learning Credit is $2,000 per return (not per student) and covers tuition and fees for any level of education or training, including graduate school and courses to improve job skills. It is not refundable, so it can only reduce your tax bill to zero. Your MAGI must be below $80,000 for single filers or $160,000 for married couples to claim the full credit.

You cannot claim both credits for the same student in the same year, but you can claim one credit for one student and the other credit for a different student in the same household.

Energy and Home Improvement Credits

The Residential Clean Energy Credit covers the cost of installing solar panels, wind turbines, geothermal heat pumps, battery storage, and other renewable energy systems on your home. The credit is 30 percent of the cost, with no dollar limit and no income limit. You can claim it in the year the system is installed, and unused credit carries forward to future years.

The Energy Efficient Home Improvement Credit covers the cost of upgrading to an energy-efficient heat pump, air conditioner, water heater, or furnace, as well as insulation, windows, and doors. The credit is up to $3,200 per year for heat pumps and heat pump water heaters, and up to $1,200 per year for other improvements. There is a lifetime limit of $3,200 for windows and doors combined. These credits have no income limit.

Both energy credits are nonrefundable, meaning they reduce your tax bill but do not result in a refund. You claim them on Form 5695 (Residential Energy Credits).

Retirement Savings Credits and Other Credits

The Retirement Savings Contributions Credit (Saver's Credit) is for people with low income who contribute to a traditional or Roth IRA, a 401(k), or similar plan. The credit is 10, 20, or 50 percent of your contribution, up to a maximum of $1,000. Your MAGI must be below $68,250 for married couples filing jointly, $51,187 for head of household, or $34,125 for single filers in 2025.

Other credits include the Adoption Credit (up to $15,000 per child adopted), the Dependent Care Credit (up to $3,000 in care expenses), and the Nonbusiness Energy Property Credit for certain home improvements made before 2024. The Dependent Care Credit is worth 20 to 35 percent of your expenses depending on income, and is nonrefundable.

The Child and Dependent Care Credit covers costs you paid for daycare, preschool, or summer camp while you worked or looked for work. You can claim up to $3,000 in expenses for one dependent or $6,000 for two or more dependents. The credit is 20 to 35 percent of those expenses, depending on your MAGI.

How to claim tax credits on your return

You claim tax credits by filing a tax return with the IRS, either on paper or through tax software. The IRS does not tell you which credits you may claim; you must determine this yourself or work with a tax preparer. Many free tax preparation programs, such as VITA (Volunteer Income Tax information) sites, can help you identify credits you may have access to for and file your return at no cost.

Each credit requires a specific form or schedule. The Child Tax Credit goes on Schedule 8812 if you are claiming the refundable portion. The EITC goes on Schedule EIC. Education credits go on Form 8863. Energy credits go on Form 5695. Your tax software will guide you through which forms you need based on your answers.

Keep records of any expenses or documents that support your claim. For education credits, keep tuition statements. For energy credits, keep receipts and invoices. For the EITC, keep proof of income and proof that children live with you. The IRS may ask for these documents if it audits your return.

Frequently Asked Questions

Can I claim more than one credit in the same year?

Yes. You can claim the Child Tax Credit, the EITC, education credits, energy credits, and others all on the same return if you meet the requirements for each one. However, some credits cannot be claimed together for the same person or expense—for example, you cannot claim both the American Opportunity Credit and the Lifetime Learning Credit for the same student in the same year.

What if I do not owe any tax? Can I still get money back from a refundable credit?

Yes, if the credit is refundable. The EITC and the Additional Child Tax Credit are fully refundable, so if they are larger than your tax bill, the IRS sends you the difference. Nonrefundable credits can only reduce your bill to zero; they do not result in a refund.

Do I have to file a tax return to claim a credit?

Yes. You must file a return with the IRS to claim any credit. Even if you have no tax bill, you should file if you are owed a refundable credit like the EITC or the Additional Child Tax Credit.

What is the difference between a tax credit and a tax deduction?

A tax credit reduces your tax bill dollar for dollar. A deduction reduces the income that is subject to tax. A $1,000 credit saves you $1,000 in tax. A $1,000 deduction saves you tax equal to your tax rate—for example, $220 if your rate is 22 percent. Credits are generally more valuable.

Where can I get help figuring out which credits I may have access to for?

VITA sites offer free tax preparation and can help you identify credits. You can find a VITA site near you through the IRS website. Tax software often has a questionnaire that asks about your situation and suggests credits you may claim. A tax preparer or CPA can also review your situation and recommend credits.