Tax credits are more valuable than deductions because they reduce your tax bill dollar-for-dollar. A $1,000 credit saves you $1,000, while a $1,000 deduction might only save $220 (if you're in the 22% bracket).
Many taxpayers miss out on credits they qualify for simply because they don't know they exist. Here's every major credit available in 2025.
💡 Refundable vs. Non-Refundable Credits
Refundable credits can give you a refund even if you owe no taxes. Non-refundable credits can only reduce your tax to $0.
Family & Dependent Credits
One of the most valuable credits for families with children under 17.
Requirements:
- Child must be under 17 at end of tax year
- Must be your dependent with valid SSN
- Income limits: $200,000 (single) / $400,000 (married)
- Up to $1,700 is refundable (Additional Child Tax Credit)
For working parents who pay for childcare or adult dependent care.
Requirements:
- Care must enable you to work or look for work
- 20-35% of up to $3,000 expenses (1 child) or $6,000 (2+ children)
- Dependent must be under 13 OR disabled
- Non-refundable
Education Credits
For the first 4 years of college education.
Requirements:
- Pursuing a degree at eligible institution
- Enrolled at least half-time
- Income limits: $80,000 (single) / $160,000 (married) for full credit
- 40% refundable (up to $1,000)
For any post-secondary education, including graduate school and skills courses.
Requirements:
- No degree requirement or enrollment minimum
- 20% of first $10,000 in qualified expenses
- Can use for unlimited years
- Non-refundable
Income-Based Credits
Powerful credit for low-to-moderate income workers. Many who qualify don't claim it!
2024 Maximum Credit:
- No children: $632
- 1 child: $4,213
- 2 children: $6,960
- 3+ children: $7,830
- Fully refundable
Reward for contributing to retirement accounts if you're lower income.
Requirements:
- Must contribute to 401(k), IRA, or similar
- Income under $36,500 (single) / $73,000 (married)
- Credit rate: 10%, 20%, or 50% depending on income
- Non-refundable
Energy & Home Credits
For solar panels, wind turbines, geothermal heat pumps, and battery storage.
Eligible Improvements:
- Solar electric panels and water heaters
- Wind turbines and geothermal heat pumps
- Battery storage (3 kWh+)
- Fuel cells
- Available through 2032
For smaller energy efficiency upgrades to your home.
Eligible Improvements:
- Heat pumps and biomass stoves: up to $2,000
- Insulation, windows, doors: up to $1,200
- Home energy audit: up to $150
- Can claim both limits in same year
For purchasing a new qualifying electric or plug-in hybrid vehicle.
Requirements:
- Vehicle must be assembled in North America
- Battery and mineral requirements apply
- Income limits: $150,000 (single) / $300,000 (married)
- Can be taken as point-of-sale discount
Find Credits You Qualify For
Our AI calculator helps identify credits based on your situation.
Calculate Now →Key Takeaways
- Credits are more valuable than deductions - don't overlook them
- Refundable credits can result in a refund even if you owe no tax
- Many people miss the EITC - use the IRS EITC Assistant to check eligibility
- Energy credits are especially generous right now - take advantage
- Keep documentation for all credit claims in case of audit
Disclaimer: This guide is for informational purposes only. Tax laws change frequently - consult a tax professional for advice specific to your situation.