The following are 25 Tax Credits Worth Knowing—So You Pay Less (Legally)
From families to freelancers to landlords and small employers, these credits can meaningfully shrink your tax bill. Use this checklist, then let RDA Tax Services confirm eligibility, optimize amounts, and file cleanly.
Family, Work, and Education
- Earned Income Tax Credit (EITC) – A refundable credit for low-to-moderate earners; larger with qualifying children.
Example: A single parent with two kids and W-2 wages may receive a four-figure refund even with little tax due. - Child Tax Credit (CTC) – For each qualifying child under age 17 (refundable portion possible).
Example: A couple with a 6-year-old gets the CTC; phase-outs apply at higher incomes. - Credit for Other Dependents (ODC) – A nonrefundable credit for dependents who don’t qualify for CTC (e.g., older child, parent).
Example: You support your 20-year-old college student who isn’t a CTC child—claim the ODC. - Child & Dependent Care Credit – For work-related daycare/after-school costs so you (and spouse) can work or look for work.
Example: You pay a licensed provider for your 3-year-old’s care; a portion of those costs becomes a credit. - American Opportunity Credit (AOC) – Up to 4 years of undergraduate tuition/fees/books; partially refundable.
Example: Paying $3,000 in qualified expenses for a first-time undergrad can yield a substantial credit. - Lifetime Learning Credit (LLC) – For post-secondary courses and skills training (no year limit, lower max than AOC).
Example: Grad-school tuition or professional coursework may qualify even part-time. - Saver’s Credit (Retirement Savings Contributions Credit) – For low-to-moderate income savers who contribute to IRAs/401(k)s.
Example: A married couple contributing $2,000 to IRAs may receive a credit on top of the deduction.
Health and Insurance
- Premium Tax Credit (ACA) – Helps offset Marketplace health plan premiums; reconciled with Form 1095-A.
Example: Your income ends up lower than projected—reconciliation can increase your credit (or reduce repayment).
Home & Energy
- Energy Efficient Home Improvement Credit (25C) – Annual credit for qualifying upgrades like insulation, efficient windows/doors, heat pumps, panels, and even a home energy audit (sub-limits apply).
Example: Replacing drafty windows and adding insulation may generate credits this year—and again next year. - Residential Clean Energy Credit (25D) – 30% credit for solar, battery storage, geothermal, certain fuel cells.
Example: Install a rooftop solar + battery system and claim 30% of qualified costs as a credit (carryforward allowed if needed).
Vehicles & Charging
- Clean Vehicle Credit—New EVs – Credit for qualifying new electric/plug-in vehicles (income, vehicle, and assembly rules apply; many allow point-of-sale transfer).
Example: Buying a qualifying new EV could reduce your tax or lower the purchase price via dealer transfer. - Clean Vehicle Credit—Used EVs – A separate credit for eligible previously owned EVs (price, age, and income caps).
Example: Purchasing a used qualifying EV under the price threshold can net a sizable credit. - Alternative Fuel Refueling Property Credit (Home EV Charger) – Credit for installing qualified home charging equipment (location rules and caps apply).
Example: Installing a Level 2 charger at home may qualify—RDA will check eligibility by census tract. - Commercial Clean Vehicle Credit (for business use) – For vehicles used in a trade or business (different calculation than the personal EV credit).
Example: Your small company purchases an electric delivery van and claims a business credit.
Adoption, Elderly/Disabled, and Special Situations
- Adoption Credit – Nonrefundable credit (carryforward allowed) for qualified adoption expenses; special-needs adoptions often qualify for the max.
Example: Agency fees, court costs, and travel for a finalized adoption may be credited. - Credit for the Elderly or the Disabled – For qualifying taxpayers age 65+ or permanently disabled with limited income.
Example: A retired taxpayer with modest income may qualify for a small but valuable credit. - Mortgage Interest Credit (MCC) – If you received a Mortgage Credit Certificate from a state/local program, you may claim a percentage of mortgage interest as a credit.
Example: First-time homebuyer with an MCC credits part of annual interest instead of just deducting it. - Excess Social Security/ RRTA Withholding Credit – If multiple employers withheld too much Social Security in a year, you can claim the excess back as a credit.
Example: Two jobs, each hit the wage base—RDA ensures the extra withholding is refunded. - Credit for Prior Year Minimum Tax (AMT Credit) – If you paid AMT due to timing (deferral) items in earlier years, you may be able to credit some of it later.
Example: Prior AMT from incentive stock options could generate AMT credit carryforwards. - District of Columbia First-Time Homebuyer Credit – A niche federal credit for purchases in DC.
Example: If you bought in DC and meet program rules, you might lower your federal tax beyond deductions.
International and Investment
- Foreign Tax Credit (FTC) – For foreign income taxes paid on income that’s also taxed by the U.S. (alternative to the deduction).
Example: Tax withheld on international mutual-fund dividends can be credited to avoid double taxation.
For Small Employers & Self-Employed (still you as a taxpayer)
- Small Employer Pension Plan Startup Credit – Substantial credit for starting a 401(k)/SEP/SIMPLE; enhanced under recent law (plus possible credit for employer contributions).
Example: A sole proprietor launches a safe-harbor 401(k); the plan’s startup/admin costs generate a credit. - Small Employer Health Insurance Tax Credit (SHOP) – For very small employers offering coverage through SHOP with modest average wages and employer premium contributions.
Example: A 6-employee firm paying ≥50% of premiums through SHOP may qualify. - Work Opportunity Tax Credit (WOTC) – For employers who hire from targeted groups (pre-screening required).
Example: Hiring a long-term unemployment recipient can yield a federal income-tax credit. - Research Credit (R&D) – For qualifying research expenses; certain startups can elect to offset payroll tax.
Example: A small software firm documenting qualified development work claims the credit and applies it against payroll taxes.
Why partner with RDA Tax Services
- We match you to the right credits (and avoid dead ends) by screening income limits, phase-outs, and documentation requirements.
- We compare credit vs. deduction where you have a choice (e.g., FTC vs. deduction; energy planning across multiple years).
- We plan timing (education, energy installs, EV purchases, retirement plans) to capture the maximum legal benefit.
Bottom line: Credits are powerful—but only if you claim them correctly.
👉 Book your FREE Credit Review with RDA Tax Services and let’s turn this checklist into real savings on your next return.