Federal Tax Credits

Federal Tax Credits

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. They can help you reduce your taxable income and 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.

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.

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: 

ATTENTION: See extended or expired tax breaks, tax credits, and tax deductions.


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.

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.

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 2018 is $13,840 per qualifying child.

More information on children tax credits

More tax credits for parents with dependents and children

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.


The Earned Income Tax Credit (EITC) is a credit for taxpayers who earn low to moderate incomes. EITC can reduce your taxes and may result in a tax refund. This means more working families and individuals may keep more of the money they earned. 

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.

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.


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.


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: See our complete list of many student tax related topics.


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 2018, 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.


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.

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!

Research & References of Federal Tax Credits|A&C Accounting And Tax Services

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