Tax credits can reduce the amount of tax you owe, and some credits may even increase your refund. The credits available to you depend on your income, filing status, and personal circumstances. Below are some of the most common federal tax credits you may be able to claim on your 2026 tax return.
1. Foreign Tax Credit (Form 1116)
If you earned income in a foreign country and paid taxes on that income to a foreign government or a U.S. possession, you may qualify for the Foreign Tax Credit. This credit helps prevent the same income from being taxed twice, once by the foreign country and again by the United States.
Generally, you may qualify if:
- You paid or accrued income taxes to a foreign country or U.S. possession, or
- You paid taxes that were imposed in place of an income tax.
You generally cannot claim the credit for:
- Taxes that were refunded to you.
- Taxes paid to certain countries not recognized by the United States.
Form 1116 is used to calculate and claim this credit.
2. Child and Dependent Care Credit (Form 2441)
If you paid for the care of a qualifying child or dependent so you could work or look for work, you may qualify for the Child and Dependent Care Credit.
Keep in mind:
- This is generally a nonrefundable credit, meaning it can reduce your tax liability but will not create a refund by itself.
- If you file a joint return, both spouses typically must have earned income unless an exception applies.
You'll need information about your care provider and the amounts paid during the year.
3. Education Credits (Form 8863)
You may be eligible for an education credit if you paid qualified higher education expenses for yourself, your spouse, or a dependent.
Common qualifying expenses include:
- Tuition
- Required enrollment fees
- Certain course-related expenses
Two education credits may be available:
- American Opportunity Credit
- Lifetime Learning Credit
The school must generally be an eligible educational institution that participates in federal student aid programs.
4. Retirement Savings Contributions Credit (Form 8880)
Also known as the Saver's Credit, this credit rewards eligible taxpayers who contribute to retirement accounts.
Qualifying contributions may include:
- Traditional IRA contributions
- Roth IRA contributions
- Elective deferrals to a 401(k), 403(b), governmental 457(b), SEP, or SIMPLE plan
- Voluntary employee contributions to certain qualified retirement plans
- Contributions to a 501(c)(18)(D) plan
- Contributions made by a designated beneficiary to an ABLE account
To qualify, you generally must:
- Be age 18 or older
- Not be a full-time student
- Not be claimed as a dependent on another taxpayer's return
- Meet the applicable adjusted gross income (AGI) limits for the tax year
The amount of the credit varies based on your income and eligible contributions.
5. Adoption Credit (Form 8839)
If you paid qualified expenses to adopt an eligible child, you may be able to claim the Adoption Credit.
Qualified expenses may include:
- Adoption fees
- Attorney fees
- Court costs
- Travel expenses related to the adoption
For tax year 2026, the maximum adoption credit is generally $17,670 per eligible child. The credit begins to phase out at higher income levels. Certain special-needs adoptions may qualify for the full credit even if your actual expenses were less than the maximum allowed.
If your credit is larger than your tax liability, any unused nonrefundable portion may generally be carried forward for up to five years.
Expenses reimbursed by an employer or another source generally cannot be claimed as qualified adoption expenses.
6. District of Columbia First-Time Homebuyer Credit (Form 8859)
The D.C. First-Time Homebuyer Credit was available for qualifying home purchases in the District of Columbia made after August 4, 1997.
Although new claims are no longer allowed, taxpayers who claimed the credit in prior years may still be able to carry forward any unused credit from earlier tax returns.
7. Child Tax Credit and Credit for Other Dependents
If you have qualifying dependents, you may be eligible for one of these credits:
- Child Tax Credit for qualifying children who meet the age and dependency requirements.
- Credit for Other Dependents for certain dependents who do not qualify for the Child Tax Credit.
Your eligibility and credit amount depend on factors such as:
- Your filing status
- Income level
- The age and relationship of the dependent
- Whether the dependent meets IRS eligibility requirements
When you enter your dependent information, the tax software will automatically determine whether you qualify and calculate the appropriate credit.