Federal Tax Credits for Family, Children, Home, & Work
What is a Tax Credit?
A tax credit reduces your tax payments. It's similar to keeping bigger slices of an apple: the more tax credits you claim, the more of your money you get to keep (and decrease your tax payments in the process!).
Tax deductions are similar to tax credits. Deductions can help you reduce your taxable income, as well as increase your tax refund.
When you prepare your tax return on efile.com, we will automatically generate the correct form(s) for you to report your tax credit or deduction based on the information you provide.
How Do I Qualify to Claim Tax Credits?
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 December 31.
What Are the Different Types of Tax Credits?
Take a little time to learn more about these tax credits now and you may save hundreds or thousands of dollars on your tax return:
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
ATTENTION: See tax breaks, tax credits, or deductions that could expire or have expired.
What Are the 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.
eFile Tax Tip: Use the FREE efile.com "KIDucator" child tax credit tax tool to find whether or not you qualify for the Child Tax Credit.
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 Tax 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.
Adoption Tax Credit
The Adoption Tax 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 Tax Credit amount for Tax Year 2016 is $13,460 per qualifying child.
Other Tax Credits for Parents with Children or Dependents
More information on children tax credits
More tax credits for parents with dependents and children
Credit for the Elderly and Disabled
You may be able to claim 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.
What Are Tax Credits for Homeowners?
Home Energy Tax Credits
There is a home energy 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.
What Are Tax Credits for Employees or 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.
eFile Tax Tip: Use our FREE "EICucator" earned income tax 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.
What Are Medical Tax Credits?
Premium Tax Credit
Individual taxpayers and families may be able to claim the refundable Premium Tax Credit if they have low to moderate incomes and purchased health insurance through the Health Insurance Marketplace at HealthCare.gov. They can have the credit paid in advance to their insurance company in order to decrease their monthly premium payments or claim all of the credit on on their tax return.
What Are Tax Credits for Education?
Student Tax Credits
There are two major education tax credits available for both new and continuing students: 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.
eFile Tax Tip: Our student page has a complete list of many student tax related topics. It's a must for any student.
What Are 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 (especially if they contribute to a retirement plan).
For Tax Year 2016, the Saver's Credit allowed taxpayers to reduce their income tax dollar-for-dollar by up to $1,000 ($2,000 for married filing jointly). The exact amount of the credit depends on their income, filing status, and the total amount of their qualified contributions.
What Are Green Energy Tax Credits?
Hybrid / Electric Car Credit
There are two tax credits available to individuals who purchased an energy-efficient car in 2016:
- If you bought a new qualified fuel cell vehicle in 2016, you may be eligible for the Alternative Motor Vehicle Credit.
- You may qualify for the Tax Credit for Plug-in Electric Drive Motor Vehicles (worth up to $7,500) if you purchased a two- or three-wheeled vehicle. The amount of your credit generally depends on the year the vehicle was made.
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, and it is currently available through 2016.
What Are Miscellaneous or 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.
Where Can I Find More Information on Tax Breaks and Savings?
Tax Credit Planning Tips
Qualify for Tax Deductions
All-Year Tax Planning Tips
See if you qualify to claim tax deductions and credits by using the efile.com free tax tools!