Federal Tax Credits for Family, Children, Home, Work, and School

Keep a bigger slice by claiming more tax credits!

What is a Tax Credit?

A tax credit reduces your tax payments.

There are many federal income tax credits that will help reduce your tax burden. Take a little time to learn more about these tax credits now and you may save hundreds, even thousands of dollars on your 2012 Tax Return!

Tax credits are similar to tax deductions. Deductions can help you reduce your taxable income, as well as increase your tax refund. Learn more about tax deductions.

Tax Credits for Tax Year 2012

In order to claim most tax credits (except some retirement contributions) for the current Tax Year, the payments or expenses have to occur during the Tax Year or no later than Dec. 31.

ATTENTION: Tax Year 2012, which will end by Dec. 31, 2012, is a rather unusual tax year, since many credits and deductions and might expire. Please review these tax breaks, tax credits, or deductions that could expire.

Please review these major tax deduction areas as they might apply to your current life situation or circumstance:

Tax Credits for Families and Parents Tax Credits for Homeowners

Tax Credits for Employees/Workers Medical Tax Credits

Tax Credits for Education Retirement Tax Credits

Green Energy Tax Credits Miscellaneous/Other Tax Credits

Tax Credits for Families and Parents

Child Tax Credit

The Child Tax Credit is worth up to $1,000 for each qualifying child. This tax credit is meant to provide help to parents with qualifying children. The Child Tax Credit is different from the Child and Dependent Care Credit.

Learn More about the Child Tax Credit

eFile Tax Tip: Use the FREE efile.com "KIDucator" child tax credit tax tool to find whether you qualify for the child tax credit or not.

Child and Dependent Care Tax Credit

Child and dependent care can be very expensive. However, there are certain cases where you may claim a deduction on family-related expenses if you are in the process of looking for a job. Depending on the particulars of the situation, you may reduce your tax by claiming the child and dependent care credit on your federal income tax return for any expenses related to payments made to someone to care for a child under the age 13, a qualifying spouse, or a dependent.

Learn More about the Dependent Care Tax Credit

Adoption Tax Credit

The adoption credit is designed to help parents with the expenses involved in adopting a qualified child. An eligible child is any child under 18 or a child with special needs that lacks the ability to care for him or herself. The maximum available Adoption Credit to $12,650 per qualifying child for expenses incurred in 2012.

Learn More about the Adoption Tax Credit

Tax Information for Parents with Children or Dependents

More information on children tax credits

More tax credits, deductions for parents with dependents, children

Credit for the Elderly and Disabled

You may be able to take the credit for the elderly or the disabled if you are 65 years of age or older, or if you retired on total and permanent disability and have taxable disability income. To take the credit, however, your income must not exceed certain limits.

Learn More about the Credit for the Elderly or Disabled

Tax Credits for Homeowners

Home Energy Tax Credits

There is a tax credit available for installing a renewable-energy source in your home, such as solar panels or a geothermal heat pump. The Residential Energy Efficient Property Credit can be worth up to 30% of your expenses.

Learn More about Home Energy Tax Credits

Tax Credits for Employees/Workers

Earned Income Tax Credit

The Earned Income Tax Credit (EITC) is a credit for taxpayers who earn low to moderate incomes. EITC can reduce your taxes, and can mean a refund. Meaning more working families and individuals may keep more of what they work for.

Learn More about the Earned Income Tax Credit

eFile Tax Tip: Use our FREE "EICucator" earned income credit tax tool to find out whether or not you qualify to claim the credit on your Tax Return.

Foreign Tax Credit

The foreign tax credit was implemented to reduce a double tax burden for citizens earning income outside of the United States—once by the United States and again by the foreign country where the income is derived.

Learn More about the Foreign Tax Credit

Medical Tax Credits

Health Coverage Tax Credit

If you receive Trade Adjustment Assistance (TAA, ATAA, or RTAA) or Pension Benefit Guaranty Corporation (PBGC) payments, you may qualify for the Health Coverage Tax Credit, which may help you pay up to 72.5% of your health insurance premiums. The HCTC is a refundable credit, so it will be paid to you even if you do not owe any tax at the end of the year.

Learn More about the Health Coverage Tax Credit

Tax Credits for Education

Student Tax Credits

There are two major tax credits available for both new and continuing students for Tax Year 2012: the American Opportunity Credit and the Lifetime Learning Credit. Each credit offers special advantages to students but both credits may not be claimed by the same student in the same year.

Learn More about Education Credits for Students

eFile Tax Tip: Our student page has a complete list of many student tax related topics. It's a must for any student.

Retirement Tax Credits

Saver's Credit - Retirement Savings Contribution Credit

The Saver's Credit, formerly known as the Retirement Savings Contributions Credit, helps middle-income families to save for retirement. If you contribute to a retirement pension plan, the Saver's Credit may allow you to reduce your income tax dollar-for-dollar by up to $1,000 ($2,000 for married filing jointly). The exact amount of the credit depends on your income, your filing status, and the total amount of your qualified contributions.

Learn More about the Saver's Credit

Green Energy Tax Credits

Hybrid / Electric Car Credit

If you bought a new fully electric car or a plug-in hybrid in 2012, you may be eligible for the Alternative Motor Vehicle Tax Credit . For Tax Year 2012, this credit is worth $7,500 for most qualifying vehicles.

Learn More about the Alternative Motor Vehicle Credit

Home Energy Tax Credit

If you installed a renewable-energy source in your home, such as small wind turbines a solar water heater, you may qualify to claim the Residential Energy Efficient Property Credit. This tax credit can be worth up to 30% of your expenses.

Learn More about Home Energy Tax Credits

Miscellaneous/Other Tax Credits

Tax Credits for American Citizens Living, Working Abroad

U.S. citizens and resident aliens from the United States working or living in a foreign country during the year are allowed the same tax credits as U.S. citizens and residents from the U.S. living in the United States. Check out our detailed summary on tax credits for Americans living or working abroad.

When Should I Plan to Claim These Tax Credits on My Tax Return?

It is important to act and plan now during the year. These tax breaks provide a financial boost for many taxpayers in various life situations.

These tax changes will impact Tax Year 2012 Individual Income Tax Returns (due by April 15, 2013). Please check back often since we will post more details about these tax changes as they become available.

Are There Tax Credits That Have Expired?

Every Tax Year, the tax laws often change. As a result of rewritten tax rules, tax breaks change or expire. In addition, dollar amounts are adjusted every year to adapt to the new laws.

For the upcoming tax season, there are many tax breaks (including credits) that have expired or changed on December 31, 2011. This means that you cannot claim them on your 2012 Tax Return, unless Congress takes action to renew or retroactively extend them.

Review our comprehensive list of expired or changed tax laws that could affect your 2012 Tax Return or previous year Tax Return(s).

How Will I Know Which Tax Credits Are Right For Me?

When you prepare your tax return on efile.com, the online tax software will determine what tax credits you qualify for, and calculate how much they are worth to you. The software will generate the correct tax forms for you, to make sure you get all the tax credits you deserve.

Before you prepare your tax return and as a tax preparation planning tool, please learn more about the common tax credit and tax deduction options listed here. Remember that every eligible tax deduction or tax credit will either increase your tax refund or reduce the taxes that you owe.

eFile Tax Tip: Use our tax return preparation and tax credit checklist to line up all the deductions you're claiming on your 2012 Tax Return.

New, Free eFile Tax Tools-Taxucate Yourself & Taximate Your Credits!

To help you find out which tax credits you qualify for, we offer an assortment of free, online tax tools. All of the following easy-to-use tax educator and tax estimator web tools are FREE of charge!

FREE efile Tax Educator Tools

These tools are great to optimize your tax return. Simply answer a few easy questions and get results immediately.

Use our "DEPENDucator" (qualifying child dependent tax tool) to help you determine whether a qualifying child can be a dependent on your tax return or not.
Did you know that you could claim a qualifying relative (stepchild, grandchild, significant other, etc.) as a dependent on your tax return? Use our "RELucator" (qualifying relative tax tool) to find out if someone counts as your qualifying relative.
Are you a HOH (Head of Household)? Our "HOHucator" (head of household qualifying person tax tool) will assist you in determining if you have a qualifying person to use for the HOH tax return filing status.
If you work for a living but earn a low or modest income, you might qualify for the Earned Income Tax Credit (EIC or EITC). The "EICucator" (the Earned Income Credit tool) will let you know whether or not you can claim it.
You may be able to claim the Child Tax Credit if you have dependent children. Use our "KIDucator" (Child Tax Credit tool) to find out if you qualify for the credit.

FREE efile Tax Calculator & Tax Estimator Tools

After you have used all of the above Tax Educator Tools, you can either estimate your 2012 tax refund or your IRS tax payment by using our "TaxStimator" (tax estimator, tax calculator).

Taxucate and Taximate with our eFile Tax Tools for easier tax return preparation!

Are There Other Ways I Can Save Money on Taxes?

Besides claiming tax credits, there are other ways to save money on your taxes! Review our up-to-date list of tax deductions.