Save Yourself Thousands in 2024 by Checking Your Eligibility for 7 Tax Credits

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Tax credits could potentially save you thousands of dollars during the tax filing season. According to the IRS, a tax credit is a dollar-for-dollar amount you can claim on your tax return to reduce the income tax you owe. Eligible taxpayers can use them to reduce their tax bill and possibly increase their refund.

Check whether you’re eligible for any of these seven tax credits to help save you money in 2024.

Child Tax Credit

The Child Tax Credit (CTC) is worth up to $2,000 per qualifying child under the age of 17. Per IRS guidelines, households qualify for the full amount if they meet all eligibility requirements and annual income does not exceed $200,000, or $400,000 if filing a joint return. However, higher-income parents or guardians may be eligible for a partial credit.

Earned Income Tax Credit

The Earned Income Tax Credit (EITC) is a federal credit intended for low- to moderate-income families with children, but very low-income households without children may be eligible. 

To qualify for the EITC, you must:

• Be at least 25 years old and under 65 years old.
• Have a valid Social Security number and have lived in the country for more than six months.
• Not be claimed as a dependent on another tax return.

Working families with children must have annual incomes below about $46,560 to $63,398, depending on marital status and number of dependent children. The maximum credit amount for someone with no children is $600 and goes up to $7,430 for three or more qualifying children.

Child and Dependent Care Credit

If you paid for someone to care for your child or dependent so that you and your spouse (if filing jointly) could work, look for work or attend school, the IRS says you may qualify for the Child and Dependent Care Credit.

The credit amount is based on your income and a percentage of the expenses you incur to care for qualifying persons. The percentage depends on your adjusted gross income and the total expenses used to calculate the credit cannot be more than $3,000 per individual or $6,000 for two or more. 

American Opportunity Tax Credit

The American Opportunity Tax Credit (AOTC) is a federal tax credit that applies to qualified education expenses for the first four years of higher education. The maximum annual credit is $2,500 per eligible student, and if the credit brings your tax liability down to zero, you can have 40% of any remaining credit amount (up to $1,000) refunded to you.

Saver’s Credit

The Retirement Savings Contributions Credit, also known as the Saver’s Credit, is a tax credit for eligible contributions to an IRA, employer-sponsored retirement plan or Achieving a Better Life Experience (ABLE) account. 

To be eligible, you must be 18 or older, not claimed as a dependent and not a student. The amount of the credit depends on your adjusted gross income, which is between 10% and 50% of contributions made.

Residential Clean Energy Credit

You may qualify for the Residential Clean Energy Credit if you invested in renewable energy for your home, such as solar, wind, geothermal, fuel cells or battery storage technology.

The credit equals 30% of the costs of new, qualified clean energy property for your home installed from 2022 through 2032. The credit percentage phases down to 26% in 2033 and to 22% in 2034. The credit is nonrefundable and cannot exceed the amount you owe in taxes; however, you can carry excess unused credit and apply it to future tax years.

Electric Vehicle Tax Credit

If you bought a new electric vehicle in 2023, you could be eligible for a tax credit of up to $7,500. The nonrefundable tax credit applies to new qualifying electric or plug-in hybrid vehicle purchases. The IRS will also allow buyers to transfer the credit to registered dealers to lower the price of the car. To be eligible, modified gross income cannot exceed $300,000 for married couples filing jointly, $225,000 for heads of households or $150,000 for all other filers.

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