Tax credits reduce what you owe the IRS dollar for dollar, not just by a percentage of your income like deductions do. That distinction matters because the common tax credits for individuals available in 2026 can slash your tax bill by thousands, and some can even put money back in your pocket as a refund. Yet every filing season, taxpayers leave billions on the table simply because they didn't know a credit existed or assumed they wouldn't qualify.
The eligibility rules for each credit vary widely. Some phase out above certain income levels. Others apply only if you have dependents, education expenses, or energy-efficient upgrades to your home. A few are refundable, meaning you can receive more than you paid in taxes, while others only reduce your balance to zero. Understanding these differences is the first step toward keeping more of what you earn.
At Tax Experts of OC, our CPAs and Enrolled Agents help individuals across all 50 states identify every credit they're entitled to, and build a filing strategy around them. Whether you're catching up on back taxes or planning ahead for this year's return, accurate credit claims are one of the most effective ways to lower your liability. Below, we break down 12 tax credits you should review before filing your 2025 return this season, including who qualifies, how much each credit is worth, and what you need to claim it.
1. Tax Credit Review with Tax Experts of OC
Before you file, a professional review of your situation can uncover credits you didn't know you qualified for. The common tax credits for individuals outlined in this article each carry specific eligibility rules, income thresholds, and documentation requirements, and missing even one detail can cost you hundreds or thousands of dollars. At Tax Experts of OC, our CPAs and Enrolled Agents review your full financial picture to make sure nothing gets left behind.
What This Service Does
A tax credit review goes beyond plugging numbers into software. Our team examines your income, filing status, dependents, expenses, and life changes from the past year to identify every credit you're entitled to claim. We also check for prior-year credits you may have missed, which can open the door to amended returns and additional refunds.
When It Helps the Most
This service delivers the most value when your tax situation has changed. If you had a child, changed jobs, started a business, enrolled in school, bought a home, or made energy-efficient upgrades, your credit eligibility likely shifted and a DIY approach may not catch every opportunity. It also helps when you're dealing with back taxes, since correctly applying credits to prior returns can reduce what you owe the IRS significantly.
A single overlooked credit, like the Earned Income Tax Credit, can be worth up to $7,830 for the 2025 tax year.
What to Prepare Before You Talk to a Pro
Gathering your documents ahead of time keeps the consultation focused and productive. Bring the following:
- W-2s, 1099s, and any other income statements from the past tax year
- Social Security numbers for yourself, your spouse, and any dependents
- Records of out-of-pocket expenses for childcare, education, or medical costs
- Documentation for energy upgrades or vehicle purchases if applicable
- Prior-year tax returns, especially if you think credits were missed
What You Can Expect to Pay
Tax Experts of OC offers a 30-minute free consultation so you can discuss your situation before committing to anything. From there, pricing is transparent and quoted upfront based on the complexity of your return. Flexible payment options are available for clients facing financial hardship, so cost alone should not stop you from getting a proper review done.
Red Flags to Avoid When Hiring Help
Not every tax preparer operates at the same standard. Avoid anyone who promises a specific refund amount before reviewing your documents, charges fees based on a percentage of your refund, or refuses to sign your return as a paid preparer. You should also steer clear of preparers who suggest claiming credits you clearly don't qualify for, since the IRS holds you responsible for what appears on your return regardless of who prepared it.
2. Earned Income Tax Credit
The Earned Income Tax Credit (EITC) is one of the most valuable common tax credits for individuals with low to moderate income. It is a refundable credit, meaning it can reduce your tax bill to zero and still produce a refund if the credit amount exceeds what you owe the IRS.
What This Credit Covers
The EITC reduces the tax burden on workers who earn wages, salaries, or self-employment income within specific limits. It was designed to support lower-income workers and families, and it remains one of the largest anti-poverty tools in the federal tax code.
Who Qualifies
You must have earned income and fall within the income thresholds set for your filing status and number of qualifying children. For the 2025 tax year, your investment income cannot exceed $11,600. You also need a valid Social Security number and cannot file as Married Filing Separately.
How Much It Can Be Worth
The credit scales with your income, filing status, and family size. For the 2025 tax year, the maximum credit amounts are:
- No qualifying children: $632
- 1 qualifying child: $4,213
- 2 qualifying children: $6,960
- 3 or more qualifying children: $7,830
The IRS estimates that roughly 20% of eligible taxpayers fail to claim the EITC each year, leaving significant money unclaimed.
How to Claim It
File Schedule EIC with your Form 1040 if you have qualifying children. Without children, you still claim the credit directly on Form 1040 without the schedule. Your credit amount is calculated based on your earned income and household size.
Common Mistakes and Audit Triggers
The IRS reviews EITC claims more closely than most other credits. Claiming a child who fails the residency or relationship test is the most frequent error. Self-employed filers who underreport net income also risk losing part of the credit or drawing IRS scrutiny.
3. Child Tax Credit
The Child Tax Credit is one of the most widely claimed common tax credits for individuals with children. It reduces your federal tax bill directly and dollar for dollar, and a portion of it is refundable through the Additional Child Tax Credit (ACTC) if you qualify.
What This Credit Covers
This credit applies to each qualifying child under age 17 at the end of the tax year. It targets families with dependent children and provides a flat dollar reduction against your tax liability rather than simply lowering your taxable income.
Who Qualifies
Your child must be under 17, a U.S. citizen, national, or resident alien, and claimed as your dependent. The child must have lived with you for more than half the year and cannot have provided more than half of their own financial support. Your modified adjusted gross income (MAGI) must also fall below the phase-out threshold to receive the full credit.
How Much It Can Be Worth
For the 2025 tax year, the credit is worth up to $2,000 per qualifying child. The refundable portion (ACTC) is capped at $1,700 per child. The credit begins to phase out at $200,000 for single filers and $400,000 for married filing jointly.
If you have multiple children, the Child Tax Credit alone can reduce your tax bill by several thousand dollars in a single filing.
How to Claim It
You claim the Child Tax Credit on Form 1040, and if you qualify for the refundable portion, you complete Schedule 8812. Each qualifying child needs a valid Social Security number listed on your return before you file.
Common Mistakes and Audit Triggers
The most common error is claiming a child who does not meet the age or residency test. Divorced or separated parents sometimes both claim the same child, which automatically flags the return for IRS review. Confirm who holds the right to claim the dependent before you file to avoid this issue entirely.
4. Credit for Other Dependents
The Credit for Other Dependents fills a gap that the Child Tax Credit leaves open. If you support someone who doesn't qualify as a child under 17, this credit gives you a direct way to reduce your federal tax bill for that relationship. It is one of the common tax credits for individuals that gets consistently overlooked because many taxpayers assume dependent-related credits only apply to minor children.
What This Credit Covers
This credit applies to dependents who don't meet the age or relationship requirements for the Child Tax Credit. That includes older children still living in your household, elderly parents you financially support, or other qualifying relatives you claim on your return.
Who Qualifies
Your dependent must meet all of the following to make you eligible for the credit:
- Holds a valid Social Security number, ITIN, or Adoption Taxpayer Identification Number (ATIN)
- Is a U.S. citizen, national, or resident alien
- Can be claimed as your dependent on your return
Your modified adjusted gross income (MAGI) must also fall below the phase-out thresholds, which mirror those used for the Child Tax Credit.
How Much It Can Be Worth
The credit is worth up to $500 per qualifying dependent. It phases out when your MAGI exceeds $200,000 for single filers or $400,000 for married filing jointly. This credit is nonrefundable, so it reduces your tax liability to zero but will not produce a refund on its own.
Pairing this nonrefundable credit with refundable credits like the EITC gives you the most complete reduction of your total tax bill.
How to Claim It
You claim this credit on Form 1040 using the Child Tax Credit and Credit for Other Dependents Worksheet in the form instructions. Every dependent you list on your return needs a valid taxpayer identification number before you file.
Common Mistakes and Audit Triggers
The most frequent error is listing a dependent without a valid identification number, which disqualifies the claim outright. You also need to confirm that the person you're claiming does not qualify as a child for the standard Child Tax Credit, since applying both credits to the same individual is not permitted.
5. Child and Dependent Care Credit
The Child and Dependent Care Credit is one of the common tax credits for individuals who pay for care so they can work or look for work. Unlike the Child Tax Credit, this credit is tied directly to what you actually spend on care, which makes it especially useful for working parents and caregivers managing real out-of-pocket costs.
What This Credit Covers
This credit applies to expenses you pay for the care of a qualifying child under age 13 or a spouse or dependent who is physically or mentally unable to care for themselves. Eligible expenses include:
- Daycare centers and licensed in-home providers
- After-school care and summer day camps
- Au pairs and babysitters paid to watch your dependent while you work
Who Qualifies
You must have earned income during the year, and your payments must go to someone who is not your spouse, the parent of the qualifying child, or anyone you claim as a dependent. Your filing status must be single, head of household, qualifying surviving spouse, or married filing jointly.
How Much It Can Be Worth
The credit covers between 20% and 35% of your qualifying expenses, depending on your adjusted gross income. You can count up to $3,000 in expenses for one qualifying person or $6,000 for two or more. Higher earners receive a smaller percentage, but the credit does not phase out entirely.
Even if you use a Dependent Care FSA through your employer, you may still qualify for this credit on any remaining out-of-pocket expenses not covered by the account.
How to Claim It
You file Form 2441 with your Form 1040. You must report the name, address, and taxpayer identification number of every care provider you paid during the year, so collect that information before you file.
Common Mistakes and Audit Triggers
Paying a provider in cash without tracking records is the most common problem here. The IRS requires the provider's full name, address, and tax ID on Form 2441, and any missing identification information will result in the credit being denied outright.
6. American Opportunity Tax Credit
The American Opportunity Tax Credit (AOTC) is one of the common tax credits for individuals pursuing higher education. It provides a direct reduction to your tax bill for tuition and related costs during the first four years of post-secondary education, and up to 40% of the credit is refundable.
What This Credit Covers
This credit applies to tuition, required enrollment fees, and course materials such as books and supplies needed for your classes. Room, board, transportation, and optional student activity fees do not count as qualifying expenses under this credit.
Who Qualifies
You must be enrolled at least half-time in a degree or credential program at an eligible institution for at least one academic period during the tax year. You cannot have completed four years of higher education before the start of the tax year, and you must have no felony drug conviction on your record. The credit phases out between $80,000 and $90,000 for single filers and between $160,000 and $180,000 for married filing jointly.
How Much It Can Be Worth
The AOTC is worth up to $2,500 per eligible student per year. The credit covers 100% of the first $2,000 in qualifying expenses and 25% of the next $2,000. Up to $1,000 of the credit is refundable, meaning you can receive that amount even if you owe nothing in taxes.
A student with $4,000 or more in qualifying expenses will reach the full $2,500 credit maximum for that tax year.
How to Claim It
You file Form 8863 with your Form 1040. Your school will send you Form 1098-T, which reports your tuition payments for the year. Keep this document and any receipts for course materials to support your claim.
Common Mistakes and Audit Triggers
Claiming the AOTC for a fifth or later year of enrollment is a fast way to draw IRS attention. Also, using tax-free scholarship funds to pay for the same expenses you're claiming on the credit is not allowed, so track which payments came from which sources before you file.
7. Lifetime Learning Credit
The Lifetime Learning Credit (LLC) is one of the common tax credits for individuals who continue their education beyond the first four years that the AOTC covers. Unlike the American Opportunity Tax Credit, this credit has no enrollment limit, which makes it available to graduate students, working professionals taking a single course, and anyone returning to school later in life.
What This Credit Covers
This credit applies to tuition and required enrollment fees paid to an eligible educational institution. Course-related books and supplies only count if you pay for them directly to the school as a condition of enrollment. Personal expenses, room, board, and optional fees do not qualify.
Who Qualifies
You must pay qualifying expenses for yourself, your spouse, or a dependent enrolled at an eligible post-secondary institution. There is no requirement to pursue a degree, and there is no limit on how many years you can claim the credit. Your modified adjusted gross income (MAGI) must fall below $90,000 for single filers or $180,000 for married filing jointly to receive any portion of the credit.
How Much It Can Be Worth
The LLC is worth up to $2,000 per tax return, not per student. It covers 20% of the first $10,000 in qualifying expenses. The credit is nonrefundable, so it can bring your tax liability to zero but will not generate a refund on its own.
You cannot claim both the Lifetime Learning Credit and the American Opportunity Tax Credit for the same student in the same tax year.
How to Claim It
File Form 8863 with your Form 1040, the same form used for the AOTC. Your school sends you Form 1098-T to document tuition payments, so keep that form with your records.
Common Mistakes and Audit Triggers
Claiming both the LLC and the AOTC for the same student on the same return is one of the most common filing errors tied to education credits. You also cannot apply the credit to expenses already covered by tax-free scholarships or grants.
8. Saver's Credit
The Saver's Credit rewards lower and moderate-income individuals for contributing to retirement accounts such as a traditional or Roth IRA, 401(k), or similar workplace plan. It is one of the common tax credits for individuals that directly incentivizes long-term saving, yet many eligible taxpayers don't realize they qualify.
What This Credit Covers
This credit applies to voluntary contributions you make to a qualifying retirement account during the tax year. Eligible accounts include traditional and Roth IRAs, 401(k) plans, 403(b) plans, SIMPLE plans, and SEP-IRAs. Rollover contributions do not count toward the credit.
Who Qualifies
You must be at least 18 years old, not enrolled as a full-time student, and not claimed as a dependent on someone else's return. Your income must also fall within the following limits for the 2025 tax year:
- Single filers: up to $36,500
- Head of household: up to $54,750
- Married filing jointly: up to $73,000
How Much It Can Be Worth
The credit is worth 10%, 20%, or 50% of your contributions, depending on your income level. You can count up to $2,000 in contributions per person, making the maximum credit $1,000 for single filers and $2,000 for married couples filing jointly. This credit is nonrefundable, so it reduces your tax bill to zero but will not generate a refund on its own.
Contributing even a small amount to a qualifying retirement account could earn you a credit worth up to $1,000 while also building your long-term financial security.
How to Claim It
You file Form 8880 with your Form 1040. Your retirement account administrator will provide documentation of your contributions, so keep those year-end account statements accessible when you prepare your return.
Common Mistakes and Audit Triggers
The most common error is failing to account for recent distributions from your retirement accounts. The IRS reduces your eligible contribution amount by any distributions you took in the prior two years plus the current tax year, which can lower or eliminate the credit entirely if you made a significant withdrawal.
9. Premium Tax Credit
The Premium Tax Credit (PTC) is one of the common tax credits for individuals who buy health insurance through the federal or state marketplace. It helps lower your monthly health insurance premiums and is one of the few credits you can receive in advance rather than waiting until you file your return.
What This Credit Covers
This credit subsidizes the cost of health insurance plans you purchase through the Health Insurance Marketplace. You can apply the credit in advance to reduce your monthly premium payments, or you can claim the full amount when you file your federal tax return at year-end.
Who Qualifies
Your household income must fall between 100% and 400% of the federal poverty level, though recent legislative changes have extended eligibility above that cap for certain filers. You must also be enrolled in a qualifying marketplace plan and cannot have access to affordable coverage through an employer or government program like Medicaid or Medicare.
How Much It Can Be Worth
The credit amount depends on your income, household size, and the cost of available plans in your area. There is no fixed dollar cap, so higher premiums in your region can result in a larger credit. The IRS calculates your final credit amount on your return and reconciles it against any advance payments already made.
If your income rises during the year and you received advance payments, you may owe back a portion of the credit when you file.
How to Claim It
You file Form 8962 with your Form 1040. The marketplace sends you Form 1095-A each January, which contains the information you need to complete this form accurately. Do not file your return before this document arrives.
Common Mistakes and Audit Triggers
Failing to report income changes during the year is the most common problem with this credit. If your income increases and you do not update your marketplace application, your advance payments will exceed your actual credit, leaving you with a balance due when you file.
10. Adoption Credit
The adoption credit is one of the common tax credits for individuals who take on the significant financial responsibility of adopting a child. It helps offset the real costs that come with the adoption process, and for many families it represents one of the largest single credits available on a federal return.
What This Credit Covers
This credit applies to qualified adoption expenses you pay to finalize a domestic or international adoption. Eligible costs include adoption agency fees, court costs, attorney fees, and travel expenses directly related to the adoption process. Expenses paid to adopt your spouse's child do not qualify under this credit.
Who Qualifies
You must have adopted or attempted to adopt an eligible child, defined as someone under age 18 or any individual physically or mentally incapable of self-care. Your modified adjusted gross income (MAGI) must fall below the phase-out threshold to receive the full credit. For the 2025 tax year, the phase-out begins at $259,190 and eliminates the credit entirely at $299,190.
How Much It Can Be Worth
The maximum credit for the 2025 tax year is $16,810 per eligible child. For children with special needs, you can claim the full credit amount regardless of what you actually spent on the adoption. The credit is nonrefundable, so it can reduce your tax liability to zero but will not generate a refund on its own. Unused credit carries forward for up to five years.
If you adopt a child with special needs, you qualify for the maximum credit even if your actual out-of-pocket adoption expenses were lower.
How to Claim It
File Form 8839 with your Form 1040. Keep all receipts, agency invoices, and court documents that support your claimed expenses, since the IRS may request documentation to verify your adoption costs.
Common Mistakes and Audit Triggers
Claiming expenses in the wrong tax year is a frequent error. Domestic adoption costs are generally claimable in the year paid, while international adoption expenses are only deductible after the adoption is finalized.
11. Residential Clean Energy Credit
The Residential Clean Energy Credit is one of the common tax credits for individuals who invest in renewable energy upgrades at home. This credit rewards you for reducing your reliance on conventional energy sources by installing qualifying clean energy systems on your primary or secondary residence.
What This Credit Covers
This credit applies to costs you pay to install solar electric panels, solar water heaters, wind turbines, geothermal heat pumps, battery storage systems, and fuel cells at a qualifying residence. The credit covers both equipment and installation labor, so your full project cost factors into the calculation.
Who Qualifies
You must own the home where the system is installed, though renters can qualify for certain solar installations if they bear the cost directly. The property must be located in the United States and used as your residence. There is no income limit attached to this credit, which makes it available to a broader range of taxpayers than most other credits on this list.
How Much It Can Be Worth
The credit is worth 30% of your total qualifying installation costs with no upper dollar cap for tax years 2022 through 2032. A solar panel system costing $20,000 would generate a $6,000 credit directly against your federal tax bill. Unused credit carries forward to future tax years if it exceeds your current liability.
A single solar installation can produce a credit large enough to eliminate your entire federal tax bill for the year.
How to Claim It
File Form 5695 with your Form 1040. Keep all contractor invoices and product certifications for every system you install, since the IRS may request documentation to confirm the equipment meets federal energy standards.
Common Mistakes and Audit Triggers
Claiming the credit for a rental property you do not personally use as a residence is a common error that disqualifies the claim. You also cannot include costs for equipment that does not meet current federal certification standards, so verify eligibility with your installer before filing.
12. Clean Vehicle Credit
The clean vehicle credit is one of the common tax credits for individuals who purchase a new or used electric or plug-in hybrid vehicle. If you buy a qualifying vehicle, this credit gives you a direct reduction against your federal tax liability rather than just a deduction from your taxable income.
What This Credit Covers
This credit applies to purchases of new clean vehicles, which include fully electric cars, plug-in hybrid electric vehicles (PHEVs), and fuel cell vehicles. A separate credit covers used clean vehicles bought from a licensed dealer, so both new and pre-owned buyers have a path to savings.
Who Qualifies
Your modified adjusted gross income (MAGI) must fall below the following limits to claim the new vehicle credit: $150,000 for single filers, $225,000 for heads of household, and $300,000 for married filing jointly. For the used vehicle credit, income limits are lower: $75,000 for single filers, $112,500 for heads of household, and $150,000 for married filing jointly. The vehicle must also meet manufacturer's suggested retail price caps set by the IRS.
How Much It Can Be Worth
The new clean vehicle credit is worth up to $7,500, while the used clean vehicle credit is worth up to $4,000 or 30% of the sale price, whichever is less. Both credits are nonrefundable, so they reduce your tax bill to zero but will not produce a refund.
Starting in 2024, you can transfer your clean vehicle credit to the dealer at the point of sale, effectively reducing your purchase price upfront instead of waiting until you file.
How to Claim It
File Form 8936 with your Form 1040. Keep your purchase agreement and vehicle identification number (VIN) on hand, since the IRS requires both to verify eligibility.
Common Mistakes and Audit Triggers
Buying a vehicle that exceeds the MSRP cap disqualifies the claim entirely, so confirm price eligibility before you finalize the purchase. Purchasing from a private seller rather than a licensed dealer also disqualifies used vehicle claims.
Next Steps
The common tax credits for individuals covered in this article represent real dollar-for-dollar reductions on your federal tax bill, but only if you claim them correctly and with the right documentation. Missing a single eligibility requirement or applying a credit to the wrong tax year can cost you hundreds or thousands of dollars, and in some cases, it can trigger an IRS review. Each credit has its own rules, income thresholds, and forms, so treating them as a checklist rather than a complete filing strategy leaves money on the table.
Working with a qualified professional gives you the most reliable path to claiming every credit you're entitled to. At Tax Experts of OC, our CPAs and Enrolled Agents review your full financial picture, identify overlooked credits, and build a strategy around your specific situation. Schedule your free 30-minute consultation today and find out exactly where you stand before you file.