Tax credits people forget to claim

By Tom, CPA · Updated October 27, 2026

Part of: Easy Tax Strategies

TL;DR: Credits reduce tax dollar for dollar, yet many are missed every year: the Saver's Credit for lower-income retirement savers, the expanded child and dependent care credit (up to 50% for 2026), the American Opportunity and Lifetime Learning credits, the foreign tax credit from index funds, and the child tax credit for dependents. Home energy and EV credits mostly ended after 2025.

Educational only, not tax, legal, or investment advice. Examples are illustrations, not predictions. Rules and limits change; verify current figures and talk to a qualified professional about your situation.

A tax deduction is a coupon. A tax credit is cash. And yet people leave credits on the table because the forms have names like 8880 and 2441, which sound like Wi-Fi passwords rather than money. This checklist runs through the credits most often missed by regular households, with 2026 figures from IRS Rev. Proc. 2025-32 and Notice 2025-67, checked October 27, 2026.

Run through it once a year before you file. Part of easy tax strategies.

CPA Warning Label: Credits have strict eligibility and documentation rules; claiming one you do not qualify for can bring penalties and, for some credits, a ban on claiming it for years.

Saver's credit

The Retirement Savings Contributions Credit (Form 8880) pays 50%, 20% or 10% of up to $2,000 of retirement contributions per person ($4,000 per couple), depending on AGI. For 2026, the 50% rate applies up to $48,500 joint, $36,375 head of household and $24,250 for others; the credit disappears above $80,500 joint, $60,375 head of household and $40,250 for others. You must be 18 or older, not a full-time student and not claimed as a dependent.

Commonly missed by: young workers, part-time workers, and early retirees with a little earned income. Details in the Saver's Credit guide, including the switch to a Saver's Match deposit starting with 2027.

Dependent care

The child and dependent care credit (Form 2441) got bigger for 2026. The maximum credit rate rose from 35% to 50% of qualifying expenses, on up to $3,000 of expenses for one qualifying person or $6,000 for two or more. The rate steps down as AGI rises, but never below 20%, and the income ranges where it steps down are higher than before; the 2026 Form 2441 instructions carry the exact table. Qualifying care includes day care, before- and after-school care and day camps for children under 13, so that you (and your spouse) can work or look for work.

Coordinate with any dependent care FSA: excluded benefits reduce the expenses you can use for the credit. With the FSA cap now $7,500, a family using the full FSA generally cannot also claim the credit. See dependent care FSA vs. credit.

Education

• American Opportunity Tax Credit: up to $2,500 per eligible student for the first four years of higher education, 40% of it refundable. Phases out between $80,000 and $90,000 of MAGI ($160,000 to $180,000 joint).
• Lifetime Learning Credit: 20% of up to $10,000 of expenses per return, so up to $2,000, for any post-secondary or job-skills courses. Phases out between $80,000 and $90,000 ($160,000 to $180,000 joint); these amounts are not indexed.

Commonly missed by: parents who pay tuition from a 529 and assume no credit applies. You can claim the AOTC on tuition paid from other funds, so coordinating which dollars pay which bills matters; see the education tax credits guide.

Energy

As of October 2026, most consumer energy credits have ended under the 2025 law:

• Energy Efficient Home Improvement Credit (25C): not allowed for property placed in service after December 31, 2025.
• Residential Clean Energy Credit (25D, solar and similar): not allowed for expenditures made after December 31, 2025.
• New and used clean vehicle credits (30D, 25E): not allowed for vehicles acquired after September 30, 2025.

What to check: whether a 2025 project or vehicle still needs to be claimed on a 2025 return (an amended return if you missed it), and state or utility rebates, which are separate from federal credits. See home energy credits and EV credit status.

Foreign tax

If you own international stock index funds in a taxable account, the fund likely paid foreign taxes on your behalf. Your Form 1099-DIV shows them in box 7. You can claim a foreign tax credit for them. If all your foreign taxes are passive income reported on 1099s and total $300 or less ($600 joint), you can elect to claim the credit directly on Form 1040 without filing Form 1116.

Commonly missed by: do-it-yourself filers whose software buries box 7. It is often only tens or hundreds of dollars, but it is free.

Child tax credit and others

• Child tax credit: $2,200 per qualifying child under 17 for 2026, with up to $1,700 refundable. Requires a Social Security number for the child.
• Credit for other dependents: $500 for dependents who do not qualify for the child tax credit, such as older children or a parent you support.
• Earned income tax credit: up to $8,231 for 2026 with three or more qualifying children; smaller amounts for fewer or no children. Widely underclaimed.
• Adoption credit: up to $17,670 of expenses for 2026, with up to $5,120 refundable.

Worked example

Illustration: A married couple files jointly for 2026 with $58,000 of AGI, two children ages 6 and 9, $7,000 of after-school and summer day camp costs, no dependent care FSA, and each spouse contributed $1,000 to a Roth IRA.

• Child tax credit: 2 × $2,200 = $4,400 (limited to tax plus the refundable portion).
• Dependent care credit: expenses capped at $6,000 for two children. Under the amended Section 21, the 50% rate drops by 1 point per $2,000 of AGI over $15,000 but not below 35% until joint AGI passes $150,000, so at $58,000 the rate is 35%: 35% × $6,000 = $2,100, versus $1,200 at the old 20% rate.
• Saver's Credit: AGI of $58,000 is above $52,500 and at or below $80,500, so the 10% rate applies: 10% × $2,000 = $200.

Credits are applied in a set order, and some are nonrefundable, so the total may be limited by the couple's tax. But missing any of these would be a real loss.