Tax credits for individuals

A tax credit reduces the amount a person owes in income taxes dollar-for-dollar. Some tax credits are even refundable, meaning if a person's tax bill is less than the amount of a refundable credit, they can get the difference back in their refund. The One, Big, Beautiful Bill has brought enhancements to some of these credits.

Here’s a quick overview of some of the more common credits:

Tax credits

• Child Tax Credit helps families with qualifying children. For 2025, the amount is up to $2,200 per qualifying child.
• 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.
• Saver’s Credit may be available if a taxpayer made eligible contributions to their IRA or employer-sponsored retirement plan. The maximum credit is $1,000 ($2,000 if married filing jointly). 

Refundable tax credits

• Earned Income Tax Credit helps low to moderate-income workers and families get a tax break. The amount of the credit may vary based on income, family size and filing status.
• Premium Tax Credit is available to taxpayers who buy their health insurance through the Health Insurance Marketplace and meet other criteria. It’s a refundable credit based on the taxpayer’s income and the cost of their healthcare plan.
• Fuel Tax Credit may be claimed if fuel was purchased for use for off-highway business and farming purposes.

Partially refundable tax credits

• Additional Child Tax Credit is a refundable portion of the CTC. For 2025, up to $1,700 per qualifying child may be refundable.
• Adoption Tax Credit is available to taxpayers who finalized an adoption in 2025 or started the adoption process before 2025. The maximum amount, for 2025, is $17,280 per eligible child. The refundable amount is up to $5,000 per qualifying child. However, any nonrefundable amount carried forward can’t be used to calculate a refundable portion for future tax years.
• American Opportunity Tax Credit helps offset qualifying education expenses for an eligible college student. The amount is up to $2,500 per year and up to $1,000 is refundable.

It’s important for people to keep records to show their eligibility for the tax credits they claim. Unfortunately, scam promoters can share misleading information about credits while trying to promote large refunds. The IRS Interactive Tax Assistant can help a person decide if they're eligible for many popular tax credits and deductions.

More information

• Tax credits for individuals: What they mean and how they can help refunds