Federal Tax Credits Overview

Tax credits reduce your tax dollar-for-dollar. Some are refundable (you can get money back even if you owe $0 in tax); others only reduce tax to zero.

Credits many families use

Child Tax Credit (CTC)

For qualifying children under the age limit in effect for the tax year, subject to income phaseouts. Part may be refundable as the additional child tax credit. You generally need an SSN for the child issued by the due date of the return.

Credit for Other Dependents

A smaller nonrefundable credit may apply for dependents who do not qualify for the full CTC (for example, certain older dependents).

Earned Income Tax Credit (EITC)

A refundable credit for workers with earned income below annual limits. Amount depends on filing status and number of qualifying children. The IRS closely reviews EITC claims — keep birth certificates, school records, and residency proof.

Education credits

• American Opportunity Credit — undergraduate years, partially refundable, expense and eligibility limits apply
• Lifetime Learning Credit — broader education situations, nonrefundable

You generally cannot double-dip the same expenses. Form 1098-T helps but does not decide eligibility alone.

Health coverage

Premium Tax Credit

If you bought coverage through the Health Insurance Marketplace, Form 1095-A feeds Form 8962. Advance payments must be reconciled — skipping this is a common e-file reject.

Energy and vehicles

Residential clean energy and energy-efficient home improvement credits, plus clean vehicle credits, have specific eligibility, manufacturer reporting, and (for vehicles) often dealer-point-of-sale transfer rules. Confirm the model year and your modified AGI against current IRS pages before buying for tax reasons.

Saver’s Credit

Low-to-moderate income filers who contribute to an IRA or workplace retirement plan may qualify for the Retirement Savings Contributions Credit.

How to claim credits

1. Answer software interview questions completely (dependents, education, energy).
2. Attach required forms (e.g., 8863, 8962, 5695, 8936 as applicable).
3. Keep substantiation for at least three years.

Related: What’s new for 2026 · How to file