Tax season can be stressful, but for many low-income individuals and families, it also comes with an opportunity: getting money back from the government through tax credits.
If you earn a modest income, there are several programs that could significantly boost your refund—or even result in a payment from the IRS, even if you didn’t owe taxes in the first place.
Low-income tax credits are designed to help ease financial burdens and reward work, especially for families with children.
The good news? You don’t need to be a tax expert to claim these benefits. With a little guidance and the right tools, you can easily apply for these credits and get the support you deserve.
What Are Low-Income Tax Credits?
Low-income tax credits are financial benefits provided by the IRS that reduce the amount of tax you owe—or increase your refund if your credit is larger than your tax bill.
Some credits are even refundable, which means you can receive the remaining amount as a cash refund.
The most common tax credits for low-income earners include:
- Earned Income Tax Credit (EITC)
- Child Tax Credit (CTC)
- Additional Child Tax Credit (ACTC)
- American Opportunity Credit (for education)
- Saver’s Credit (for retirement contributions)
These credits can add up to thousands of dollars in annual support for eligible households.
Who Qualifies for Low-Income Tax Credits?
The exact requirements vary depending on the credit, but here are some general guidelines:
- You must have earned income, such as wages or self-employment income.
- Your adjusted gross income (AGI) must fall below a certain threshold, which changes based on your filing status and number of dependents.
- You must file a federal tax return, even if your income is low enough that you wouldn’t normally have to.
- Some credits require a valid Social Security number and U.S. residency status.
Let’s break down each credit so you know what you might be eligible for.
Step-by-Step: How to Claim Low-Income Tax Credits
Step 1: Gather Your Documents
Before you file, make sure you have the following:
- W-2 or 1099 forms showing your income
- Social Security numbers for yourself and dependents
- Proof of expenses (childcare, education, retirement contributions)
- Your bank account info (for direct deposit)
- Previous year’s tax return (optional but helpful)
Staying organized will make the filing process faster and ensure you don’t miss out on any credits.
Step 2: File Your Federal Tax Return
To get any of the tax credits, you must file a federal tax return. Even if you made very little money and aren’t required to file, submitting a return allows you to claim refundable credits.
You can file your taxes for free using these platforms:
- IRS Free File: For incomes under $79,000
- GetYourRefund.org: Offers free help from IRS-certified volunteers
- Tax preparation apps like Credit Karma Tax and Cash App Taxes
Always review your return before submitting to make sure all credits are applied.
Step 3: Understand the Main Credits Available
Earned Income Tax Credit (EITC)
The EITC is one of the most valuable credits for low-income workers. It’s designed to help working people, especially those with children.
Requirements:
- Must have earned income
- Investment income below a set limit
- Valid Social Security number
- Meet income limits (e.g., under $63,398 for a family with three children in 2024)
How much can you get?
- Up to $7,430 depending on your income and number of children
Tips:
- You can qualify even without children if you meet age and income criteria
- You must file a tax return to receive the credit
Child Tax Credit (CTC) and Additional Child Tax Credit (ACTC)
The CTC provides money to families with qualifying children. Part of it may be refundable as the ACTC.
Requirements:
- Child must be under age 17 and live with you more than half the year
- Must have a valid SSN
- Income phase-out begins at $200,000 (or $400,000 for joint filers)
How much can you get?
- Up to $2,000 per qualifying child
- Up to $1,600 may be refundable as ACTC
Tips:
- If your income is too low to owe tax, you can still get the ACTC
Saver’s Credit
This helps low- to moderate-income workers who contribute to retirement accounts.
Requirements:
- Be age 18 or older
- Not a full-time student or claimed as a dependent
- Contribute to a 401(k), IRA, or similar plan
How much can you get?
- Up to $1,000 ($2,000 for couples) as a nonrefundable credit
Tips:
- Even small contributions to retirement accounts can make you eligible
American Opportunity Tax Credit (AOTC)
For students or parents of students in postsecondary education.
Requirements:
- Be enrolled at least half-time in an eligible program
- Income under $90,000 (single) or $180,000 (married)
- Must pay for qualified expenses (tuition, books, supplies)
How much can you get?
- Up to $2,500 per eligible student
- 40% of the credit is refundable
Tips:
- Keep receipts from college expenses for your records
Recommended Apps and Tools to Claim Credits
GetYourRefund.org
A free, secure site created by Code for America in partnership with IRS-certified VITA volunteers.
Pros:
- Live human help
- 100% free to use
- Works on mobile and desktop
Cons:
- Wait times may vary during peak season
MyFreeTaxes.com
Sponsored by United Way, this service offers free online tax filing.
Pros:
- Powered by TaxSlayer
- No income limit for federal filing
- Step-by-step guides
Cons:
- State returns may not be free in all cases
Cash App Taxes
A fully free tax filing service built into Cash App.
Pros:
- 100% free for both federal and state
- Easy for mobile users
- Auto-imports past returns
Cons:
- No live customer support
IRS2Go App
The IRS’s official app to check refund status, access Free File, and get tax updates.
Pros:
- Check refund status instantly
- Secure and government-backed
- Also links to free filing services
Cons:
- No tax preparation features
Frequently Asked Questions (FAQ)
Can I still get a tax refund if I didn’t work?
Generally, no. Most credits require some earned income. However, if you have children or education expenses, you may still qualify for some refundable credits.
What if I missed filing last year?
You can still file up to three years back and claim any credits owed to you.
Will getting tax credits affect my other benefits like SNAP or Medicaid?
No. Tax credits do not count as income for most benefit programs.
Can undocumented immigrants claim tax credits?
You need a valid Social Security number to claim most credits. However, ITIN filers may qualify for certain education-related credits.
Do I need to use a paid tax preparer?
Not at all. There are many free and reputable services that help you file and claim all the credits you’re eligible for.
Smart Tips to Maximize Your Refund
- Don’t Skip Filing: Even if you made very little, you may still be owed money.
- Use Direct Deposit: It’s the fastest and safest way to get your refund.
- Double-Check for Credits: Use checklists or tax software to be sure you didn’t miss anything.
- Keep Records: Save copies of tax forms, receipts, and correspondence.
- Get Help Early: Don’t wait until April—free services fill up fast.
Tax credits aren’t just numbers on a form—they’re real money that can help you cover rent, buy groceries, or start saving for the future. With the right tools and a little guidance, you can make tax season work for you.
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