If you earn a low to moderate income, the Earned Income Tax Credit (EITC) can help you by reducing the amount of tax you owe. To qualify, you must meet certain requirements and file a tax return. Even if you do not owe any tax or are not required to file, you still must file a return to be eligible. If EITC reduces your tax to less than zero, you may get a refund.
Do I qualify for EITC?
You qualify for EITC if:
- You have earned income and adjusted gross income within certain limits; AND
- You meet certain basic rules; AND
- Meet the rules for those without a qualifying child; OR
- Have a child who meets all the qualifying rules for you or your spouse if you file a joint return.
EITC has special rules for:
Get Help With EITC
Use the EITC Assistant to find out:
- Your filing status
- If your child qualifies
- If you’re eligible
- The amount of credit you may receive
By claiming the Child Tax Credit (CTC), you can reduce the amount of money you owe on your federal taxes. The amount of credit you receive is based on your income and the number of qualifying children you are claiming.
Because of the COVID-19 pandemic, the CTC was expanded under the American Rescue Plan of 2021. The IRS pre-paid half the total credit amount in monthly payments from July to December 2021. When you file your 2021 tax return, you can claim the other half of the total CTC.
Learn more about the Advance Child Tax Credit.
Tax Benefits for Education
Tax benefits can help with a variety of education-related expenses. These expenses include tuition for college, elementary, and secondary school.
Find Out if You Qualify for Education Benefits
Use the Interactive Tax Assistant to see if you’re eligible for education credits or deductions. These include the:
- American Opportunity Credit
- Lifetime Learning Credit
- Student loan interest deduction
Learn About Claiming Education Benefits
An education credit helps you pay education expenses by reducing the amount you owe on your tax return. There are two types of education credits:
- The American Opportunity Tax Credit helps with expenses during the first four years of higher education. You can get a maximum annual credit of $2,500 per eligible student. If the credit lowers your tax to zero, you may get a refund.
- The Lifetime Learning Credit (LLC) can be used toward tuition payments and related expenses. To use the credit, you must attend a qualifying educational institution. Use the LLC for undergraduate, graduate, and professional degree course expenses. Or use the credit to help pay for classes that improve job skills. You can claim up to $2,000 per tax return, and there is no limit on the number of years you can claim the credit.
You must meet income limits to be eligible for these credits. And you can’t claim both credits for the same student and the same expenses.
Deduct Student Loan Interest From Your Taxes
A deduction reduces the amount of your income that is subject to tax. As a result, deductions can lower the amount of tax you have to pay. You may qualify for a deduction based on your student loan interest.
Understand How Education Savings Plans Work
Parents and students can save for school using education savings plans. These plans can help pay for elementary, secondary, and higher education expenses. The money you save or withdraw from your savings plan for qualified education expenses is tax-free. There are two types of savings plans:
- 529 plans are qualified tuition programs (QTPs) sponsored by states and colleges. They’re authorized under Section 529 of the Internal Revenue Code. With these plans, you can:
- The Coverdell Education Savings Account can be used to pay for eligible K-12 and higher education expenses. You may contribute up to $2,000 per year for each eligible student. When you open the account, the person receiving the benefits must be under 18 or have special needs.
Exclude Education Benefits From Your Income
You don’t have to pay tax on educational assistance benefits you receive from your employer under $5,250. These payments can be for tuition, books, and supplies for a course you’re taking. But, you can’t claim these expenses for any other deduction or credit, including the Lifetime Learning Credit.
Energy-related tax incentives can make home and business energy improvements more affordable. There are credits for buying energy efficient appliances and for making energy-saving improvements.
Find out if you qualify for state, local, utility, or federal incentives.
Energy Tax Breaks by State
Energy-Saving Home Improvements
Residential Energy Credits allow savings for any of these purchases for your home. These tax credits are valid through 2023:
- Solar panels
- Solar water heaters
- Small wind turbines
- Geothermal heat pumps
- Fuel-cell equipment
Energy tax incentives for biodiesel and renewable diesel extended through 2024.
Tax Relief in Disaster Situations
The Internal Revenue Service (IRS) offers special tax help to individuals and businesses hurt by a major disaster or emergency.
Get Your Tax Refund Faster After a Disaster
In a federally declared disaster area, you can get a faster refund by filing an amended return. You will need to claim the disaster-related losses on your tax return for the previous year.
Get guidance from the IRS on amending a tax return or filing an extension after a disaster.
Tax Relief for Recent Disasters
Get a list of the most recent disasters which may be eligible for tax relief.
Find More Resources About Taxes and Disasters
The Taxpayer Advocate Service (TAS) is an independent organization within the IRS that connects taxpayers with tax-related resources.
Learn more about preparing for and what to do after a disaster, including:
Finding the latest tax information related to recent disasters
Keeping tax records safe and documenting assets before a disaster
Restoring tax records if they were lost or destroyed in a disaster
Federal Tax Deductions for Charitable Donations
You may be able to claim a deduction on your federal taxes if you donated to a 501(c)3 organization. To deduct donations, you must file a Schedule A with your tax form. With proper documentation, you can claim vehicle or cash donations. Or, if you want to deduct a non-cash donation, you'll also have to fill out Form 8283.
How Much Can You Deduct?
The amount of money that you can deduct on your taxes may not be equal to the total amount of your donations.
Note: Limits on cash and non-cash charitable donations have increased or been suspended. Learn more about charitable deductions in 2021.
Keep Records of Charitable Donations
To claim deductions, it’s important to keep records of your donations to charities. You may not have to send these documents with your tax returns, but they are good to keep with your other tax records. Common documents include:
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Last Updated: January 19, 2023