If you're wondering, "What can I claim on my taxes?" you're not alone. Many taxpayers ask this question when they're expecting a larger refund or hoping to reduce what they owe. One of the best ways to improve your tax return is by claiming every tax credit you're eligible for.
Tax credits can directly reduce your tax bill and, in some cases, increase your refund. There are credits for families, students, workers, retirement savers, and homeowners who make energy-efficient improvements. If you qualify but don't claim a credit, you could be leaving money on the table.
To help you get started, here are five tax credits that taxpayers often overlook. You may not qualify for all of them, but it's worth checking. Even one credit could make a meaningful difference on your return.
1. Earned Income Tax Credit (EITC)
The Earned Income Tax Credit (EITC), sometimes called the Earned Income Credit (EIC), is one of the most valuable tax credits available to low- and moderate-income workers.
To qualify, you must have earned income and meet certain income, filing status, and eligibility requirements. The amount of the credit depends on factors such as:
- Your income
- Your filing status
- Whether you have qualifying children
Because eligibility rules can be complex, many taxpayers don't realize they qualify until they complete their return.
For more information about the Earned Income Tax Credit, see our related knowledge base article here.
2. Saver's Credit
Saving for retirement can help you in more ways than one. If you contributed to an eligible retirement account during the tax year, you may qualify for the Saver's Credit.
Eligible contributions may include:
- Traditional IRA contributions
- Roth IRA contributions
- Employer-sponsored retirement plans, such as a 401(k), 403(b), or certain other qualified plans
The credit amount depends on your filing status, income, and the amount contributed during the year.
This credit is especially helpful for taxpayers who are building retirement savings while working with a modest income.
For more information about the Saver's Credit, see our related knowledge base article here.
3. Child and Dependent Care Credit
Childcare expenses can be a major household cost. The Child and Dependent Care Credit may help offset some of those expenses if you paid for care so you could work or actively look for work.
You may qualify if you paid for the care of:
- A qualifying child under age 13
- A spouse who is physically or mentally unable to care for themselves
- Another qualifying dependent who requires care
The care must generally be necessary to allow you and, if married, your spouse to work or look for work.
If childcare costs were part of your family's budget during the year, be sure to review your eligibility for this credit.
For more information about the Child and Dependent Care Credit, see our related knowledge base article here.
4. Child Tax Credit
Raising children comes with plenty of expenses, from food and clothing to medical care, school supplies, and extracurricular activities. The Child Tax Credit is designed to help families with some of those costs.
Eligibility depends on several factors, including:
- The child's age
- Relationship to you
- Dependency status
- Income limitations
If you have qualifying children, this credit could help reduce your tax liability and potentially increase your tax benefits.
For more information about the Child Tax Credit, see our related knowledge base article here.
5. Residential Clean Energy Credit
If you invested in qualifying energy-efficient improvements for your home, you may be eligible for the Residential Clean Energy Credit.
Qualifying improvements may include:
- Solar electric systems
- Solar water heating systems
- Small wind energy systems
- Geothermal heat pump systems
Installation costs may also qualify when they are part of an eligible project.
Keep in mind that this credit is generally nonrefundable. That means it can reduce the amount of tax you owe, but it typically won't create a refund by itself if your tax liability is already zero. Unused portions of the credit may be eligible for carryforward under current tax rules when applicable.
For more information about the Residential Clean Energy Credit, see our related knowledge base article here.