What tax credits are available in 2025

Tax credits reduce the amount of tax you owe to the IRS, dollar for dollar. Unlike deductions, which lower your taxable income, a credit of $500 means you pay $500 less in tax. The credits available in 2025 depend on your income, family size, and what you spent money on during the year. The main ones are the Earned Income Tax Credit, the Child Tax Credit, the American Opportunity Tax Credit for education, and the Saver's Credit for retirement savings.

Some credits are refundable, meaning if the credit is larger than the tax you owe, the IRS sends you the difference. Others are nonrefundable, so they can only reduce your tax to zero. A few credits phase out—they shrink as your income rises above a certain point. The IRS publishes the income limits and credit amounts each January, and they shift slightly year to year based on inflation.

Key Takeaways

  • The Earned Income Tax Credit ranges from $600 to $3,995 depending on income and family size, and it is refundable, so you may receive money back even if you owe no tax.
  • The Child Tax Credit is $2,000 per child under 17, though it phases out for higher earners and is only partially refundable.
  • The American Opportunity Tax Credit covers up to $2,500 of education costs per student per year if you or a dependent attended college or vocational school.
  • The Saver's Credit gives up to $1,000 back for contributions to retirement accounts if your income is below certain thresholds.
  • You must file a tax return to claim any credit, even if you had no tax withheld and owe nothing.

Earned Income Tax Credit for workers with low to moderate income

The Earned Income Tax Credit (EITC) is a refundable credit for people who work and earn below a certain income. In 2025, the maximum credit ranges from $600 for a single person with no children to $3,995 for someone with three or more children. The exact amount depends on how much you earned and how many children you claim.

To claim the EITC, you must have earned income from a job or self-employment during the year. You cannot claim it on investment income alone. The income limits vary by filing status and number of children. For example, a single person with one child may claim the credit if their income was below roughly $46,000 in 2025, but the exact threshold changes annually. The IRS website and your tax software will show you the current limits.

The EITC is refundable, so if your credit is larger than your tax bill, you receive the extra money as a refund. Many people claim this credit on their tax return without realizing it exists, which is why the IRS sometimes sends notices about unclaimed credits from prior years.

Child Tax Credit for dependents under 17

The Child Tax Credit is $2,000 per child under age 17 at the end of the tax year. You claim it for each may have access to child you support. The credit begins to phase out—shrink—when your income exceeds $400,000 if you are married filing jointly, or $200,000 if you are single or head of household.

Unlike the EITC, the Child Tax Credit is only partially refundable. You can use it to reduce your tax to zero, and then receive up to $1,700 as a refund (this refundable portion is called the Additional Child Tax Credit). To claim the refundable part, you must have at least $2,500 in earned income during the year. If you earned less than that, you can still use the credit to reduce your tax, but you will not receive a refund.

You need the child's Social Security number and must be able to claim them as a dependent. If two parents are separated or divorced, only the parent who claims the child as a dependent on their return can claim the credit.

American Opportunity Tax Credit for education expenses

The American Opportunity Tax Credit covers up to $2,500 of education costs per student per year. It applies to the first four years of college or vocational school after high school. may be able to access expenses include tuition, fees, and course materials (books, supplies, equipment), but not room and board or transportation.

To claim this credit, the student must be enrolled at least half-time in a degree or certificate program at an accredited school. The student can be you, your spouse, or a dependent you claim on your return. The credit phases out for higher earners: it begins to shrink when your modified adjusted gross income exceeds $80,000 if you are single, or $160,000 if you are married filing jointly.

This credit is partially refundable—up to $1,000 of the $2,500 can come back to you as a refund if you owe no tax. You cannot claim both the American Opportunity Credit and the Lifetime Learning Credit for the same student in the same year, so choose the one that gives you the larger benefit.

Saver's Credit for retirement account contributions

The Saver's Credit (also called the Retirement Savings Contributions Credit) gives you money back for contributing to a retirement account. The credit is worth up to $1,000 if you are single, or up to $2,000 if you are married filing jointly. The exact amount depends on how much you contributed and your income.

You can claim this credit if you contributed to a traditional IRA, Roth IRA, 401(k), 403(b), or similar plan during the year. The income limits are strict: in 2025, you must earn below roughly $68,250 if you are single, $102,375 if you are head of household, or $136,500 if you are married filing jointly. These limits change each year.

This credit is nonrefundable, so it can only reduce your tax to zero. It is designed for lower-income workers who save for retirement, because higher earners already get a tax deduction for retirement contributions.

Other credits that may explore to your situation

Several smaller credits exist for specific situations. The Lifetime Learning Credit covers up to $2,000 of education costs per return (not per student) and applies to any year of college or graduate school, unlike the American Opportunity Credit. The Adoption Credit reimburses some costs of adopting a child. The Residential Energy Credits cover solar panels, heat pumps, and other home improvements that save energy.

The Dependent Care Credit helps pay for daycare or after-school care so you can work. The Earned Income Credit for the Elderly and Disabled is a separate credit (not the EITC) for people over 65 or permanently disabled. Each of these has its own income limits, documentation requirements, and phase-out rules.

Your tax software or a tax preparer can help you identify which credits you may be able to claim. The IRS also publishes a free guide called Publication 17, which lists all available credits and explains the rules for each one.

How to claim tax credits on your return

You claim tax credits by filing a tax return with the IRS, even if you had no income or no tax withheld. If you use tax software, the program will ask you questions about your income, family, education, and other situations, then automatically calculate which credits you may claim and fill in the correct forms.

If you file by hand, you will complete the main tax form (Form 1040) and then fill in separate schedules for each credit. For example, the EITC uses Schedule EIC, and the Child Tax Credit uses Schedule 8812. The IRS website has worksheets and instructions for each form.

You must have documentation to back up your claims. For the Child Tax Credit, you need the child's Social Security number. For education credits, you need a Form 1098-T from the school showing what you paid. For the Saver's Credit, you need a statement from your retirement account showing your contributions. Keep these documents for at least three years in case the IRS asks questions.

Frequently Asked Questions

Can I claim more than one tax credit on the same return?

Yes. You can claim the EITC and the Child Tax Credit in the same year, for example. You can also claim an education credit and the Saver's Credit together. However, you cannot claim both the American Opportunity Credit and the Lifetime Learning Credit for the same student in the same year—you must choose one.

What if my income is too high for a credit?

Many credits phase out as income rises. If your income is above the phase-out range, you cannot claim the credit at all. If your income is within the phase-out range, the credit shrinks. The IRS calculates the exact reduction based on how much your income exceeds the threshold. Your tax software will do this math for you.

Do I have to file a tax return to get a refundable credit?

Yes. Even if you had no tax withheld and owe nothing, you must file a return to receive a refund from a refundable credit like the EITC or the refundable portion of the Child Tax Credit. If you do not file, you do not receive the money.

What if I made a mistake claiming a credit last year?

You can file an amended return using Form 1040-X to correct the error. You have three years from the original due date to claim a refund or credit you missed. If the IRS overpaid you a credit by mistake, they may ask you to repay it, though some credits have limits on how much you have to repay.

Where can I find the exact income limits for 2025?

The IRS publishes income limits and credit amounts on its website (irs.gov) each January. You can also find them in the instructions that come with Form 1040 and in IRS Publication 17. Your tax software will have the 2025 limits built in and will tell you whether you may have access to based on your income.