How to Find and Claim Tax Credits You May Qualify For

Many people pay more in taxes than they need to simply because they are unaware of tax credits they could claim. Many taxpayers either do not know which credits exist or assume they do not qualify without ever checking. A tax credit is a dollar-for-dollar amount taxpayers claim on their tax return to reduce the income tax they owe, and eligible taxpayers can use them to reduce their tax bill and potentially increase their refund. Unlike deductions, which reduce your taxable income, a tax credit is a dollar-for-dollar reduction of a taxpayer's bill that can reduce the taxes owed or increase a refund amount.

The good news is that finding and claiming these credits does not require complex financial expertise. Armed with knowledge of what credits are available and how to check your eligibility, you can recover money that rightfully belongs to you. This guide walks you through the process of identifying which credits apply to your situation and the steps to claim them on your tax return.

Understanding the Basics of Tax Credits

Tax credits are offered on both the federal and state levels to incentivize certain actions, such as purchasing an electric vehicle, or to offset the cost of certain expenses, such as raising or adopting a child. The value of a tax credit depends on the type of credit and your personal circumstances. What makes credits particularly powerful is that they work differently than deductions.

Tax credits come in three main categories that affect how much money you receive. Tax credits come in three categories: refundable, partially refundable and nonrefundable. For nonrefundable tax credits, once a taxpayer's amount owed reaches zero, they won't see any leftover amount as a refund. However, some credits are refundable—they can give you money back even if you don't owe any tax. This distinction is important because it determines whether you can receive a refund that exceeds what you owe.

Common Tax Credits Available

Understanding which credits exist is the first step toward claiming them. Several major credits are available to individuals in various life situations, from raising children to pursuing education to working with modest income.

Credits for Working Families

The Earned Income Tax Credit (EITC) is one of the most valuable credits available. It is one of the most valuable credits available to working individuals and families with moderate income and is fully refundable, meaning you can receive it even if you owe no taxes. Workers and families with earned income below specific thresholds that vary based on filing status and number of qualifying children can qualify, and for 2026, single filers without children must be between ages 25 and 64 to qualify.

The Child Tax Credit applies to families with children. The Child Tax Credit helps families with qualifying children. The Child Tax Credit and Credit for Other Dependents allow you to claim tax credits for each of your qualifying dependents, and if your modified adjusted gross income (MAGI) is under $400,000 if filing jointly or $200,000 with any other filing status for 2025, this could mean $2,200 per child under 17 or $500 per other dependent. Up to $1,700 of the child tax credit may be refundable.

Credits for Child and Dependent Care

If you pay for care so you can work, the Child and Dependent Care Credit may reduce your tax liability. The Child and Dependent Care Credit can reduce federal income tax by claiming the credit for child and or dependent care expenses while the person worked or was looking for work.

Credits for Education and Retirement

The American Opportunity Tax Credit helps those paying for college. The American Opportunity Tax Credit helps offset qualifying education expenses for an eligible college student, and the amount is up to $2,500 per year with up to $1,000 refundable. For retirement savings, the Saver's Credit may be available if a taxpayer made eligible contributions to their IRA or employer-sponsored retirement plan, with a maximum credit of $1,000 ($2,000 if married filing jointly).

How to Discover Which Credits Apply to You

Not every credit applies to every person. The key is systematically checking your eligibility for each credit based on your income, family situation, and expenses. Start by reviewing which major life categories match your circumstances.

The IRS provides official tools to help identify credits. Use the EITC Qualification Assistant to find out if you were eligible for the credit. These interactive tools ask about your specific circumstances and tell you whether you likely qualify. Consulting these tools costs nothing and takes only minutes.

Steps to Claim Tax Credits on Your Return

Once you have determined which credits apply to you, the actual process of claiming them is straightforward. The method depends on how you file your taxes.

Filing Through Tax Software 🔍

To claim credits, answer questions in your tax filing software. Most tax software platforms ask a series of questions about your life circumstances and automatically prompt you about available credits. The software guides you through each relevant credit and calculates the amount you qualify for. This method is typically the easiest for most taxpayers.

Filing a Paper Return

If you file a paper return, you'll need to complete a form and attach it. Specific forms correspond to different credits—for example, if you are claiming the credit for a qualifying child, you must also complete and attach the Schedule EIC (Form 1040 or 1040-SR), Earned Income Credit with your tax return. The IRS website provides forms and instructions for each credit.

You must file a tax return to claim credits, even if you would not normally be required to file. To claim the Earned Income Tax Credit (EITC), you must qualify for the credit and file a federal tax return.

Key Takeaways for Finding and Claiming Credits 📝

• 💰 Tax credits reduce your tax bill dollar-for-dollar, making them far more valuable than deductions of the same amount.
• 🎯 Take time to check each credit category relevant to your family situation, income level, and expenses to avoid leaving money on the table.
• 📝 Use IRS.gov tools and resources, including qualification assistants and the Interactive Tax Assistant, to confirm eligibility at no cost.
• 💻 Tax software makes claiming easier by automatically prompting you about available credits and calculating amounts.
• ✅ You must file a return to claim credits, even if you have no tax liability; the payoff can be a substantial refund.
• ⏰ Some refundable credits allow you to get money back even if you owe no taxes, so never assume you do not qualify.

Taking Action: Next Steps

Start by gathering documents related to your situation: pay stubs if you are claiming the EITC, childcare receipts if eligible for dependent care credits, college expense forms for education credits, and adoption paperwork if applicable. Having these documents organized before you file makes the process faster and ensures you have supporting information if questions arise.

Next, visit IRS.gov to review the full list of credits available. Taxpayers can review the credits and deductions page on IRS.gov to see which credits they may be able to claim. Spend 15 to 20 minutes working through the qualification tools for credits in your situation category. If you are unsure about your eligibility for any credit, it's a good idea to consult a tax professional if you're unsure whether you're eligible.

Many households miss valuable credits each year simply because they did not know these opportunities existed or thought they did not qualify. By taking a systematic approach and checking your eligibility for each major credit, you can recover money that belongs to you. The effort required is minimal compared to the potential value of the credits you may discover.