Refundable vs nonrefundable credits

A refundable credit can give you a refund even if you owe no tax. The EITC, the Additional Child Tax Credit (ACTC, portion of CTC), and the Premium Tax Credit are all refundable. This is why these credits are particularly valuable for low-income workers.

A nonrefundable credit can only reduce your tax liability to zero — any excess is lost. The non-refundable portion of the CTC and the Saver's Credit are nonrefundable.

Understanding this distinction matters because some lower-income filers leave thousands of dollars unclaimed by not filing a tax return at all, thinking they don't owe taxes. If you qualify for refundable credits, you should file — even if you wouldn't otherwise be required to.

Earned Income Tax Credit (EITC)

The EITC is one of the largest federal anti-poverty programs. It provides a refundable tax credit to working low- and moderate-income individuals and families. The amount depends on income, filing status, and number of qualifying children.

2026 maximum EITC amounts

2026 EITC income limits (max earnings to qualify)

EITC eligibility requirements

• Have earned income from work (wages, salary, self-employment)
• Be a US citizen or resident alien all year
• Have a valid Social Security number for yourself, spouse, and any qualifying children
• Not file as "married filing separately" (with limited exceptions)
• Have investment income under $11,950 for 2026
• Be at least 25 and under 65 if claiming without children (with some exceptions)

For your specific situation, use our EITC Calculator. For more detail, read 2026 EITC amounts and qualification.

Child Tax Credit (CTC) — $2,200 in 2026

The Child Tax Credit was raised to $2,200 per qualifying child under age 17 by the One Big Beautiful Bill Act (OBBBA), signed July 4, 2025. This represents an increase from $2,000 in prior years.

2026 CTC at a glance

• Amount per child: $2,200 (under age 17 at end of tax year)
• Refundable portion (ACTC): Up to $1,700 per child (slight inflation adjustment from prior $1,600)
• Phaseout begins: $200,000 single / $400,000 MFJ adjusted gross income
• Phaseout rate: $50 reduction per $1,000 above threshold

Who is a "qualifying child" for CTC

A qualifying child must:

• Be your son, daughter, stepchild, foster child, sibling, half-sibling, or descendant of any of these (grandchild, niece, nephew)
• Be under age 17 at the end of the tax year
• Have lived with you more than half the year
• Not have provided more than half of their own support
• Be claimed as your dependent on your tax return
• Be a US citizen, US national, or US resident alien
• Have a Social Security number issued before the tax filing deadline

For a quick calculation, use our Child Tax Credit Calculator. For more depth, read 2026 Child Tax Credit complete guide.

Additional Child Tax Credit (ACTC) — the refundable portion

The CTC has two parts: a nonrefundable portion that reduces your tax to zero, and a refundable portion (the ACTC) that can give you a refund beyond zero tax.

For 2026, the maximum refundable portion is approximately $1,700 per child. The exact refundable amount depends on your earned income — specifically, the refundable portion is limited to 15% of earned income over $2,500.

This is why low-income working families benefit substantially: even families that owe little or no tax can receive up to $1,700 per child as an actual refund check.

Premium Tax Credit (PTC) for ACA Marketplace

The Premium Tax Credit helps cover the cost of health insurance purchased through the ACA Marketplace. It is refundable and can be received either as advance payments (reducing your monthly premium) or as a lump sum when you file taxes.

Eligibility for PTC requires:

• Household income between 100% and 400% FPL (with enhanced subsidies through 2026 extending availability above 400% FPL in some cases)
• Not eligible for affordable employer coverage
• Not eligible for Medicaid or other government coverage
• Filing a federal tax return (and if married, filing jointly with limited exceptions)

Use our ACA Subsidy Calculator to estimate your PTC.

Saver's Credit (Retirement Savings Contributions Credit)

The Saver's Credit rewards low- and moderate-income workers who contribute to retirement accounts (IRA, 401(k), etc.) with a nonrefundable tax credit of up to $1,000 ($2,000 married filing jointly).

2026 income limits (approximate):

• Single: up to $39,500 AGI
• Head of Household: up to $59,250 AGI
• Married Filing Jointly: up to $79,000 AGI

The credit rate (10%, 20%, or 50% of contributions) depends on your income level. This credit is nonrefundable, so it can only reduce your tax to zero — but for moderate-income filers who have a tax bill, it's a meaningful benefit for saving.

How tax credits stack together

Many filers qualify for multiple credits simultaneously. A typical low-income working family with two children might receive:

• EITC: ~$6,960 maximum
• CTC + ACTC: $2,200 × 2 = $4,400 (with up to $3,400 refundable)
• Premium Tax Credit: variable, often $2,000–$5,000/year if on ACA plan
• Saver's Credit: up to $2,000 if contributing to retirement (nonrefundable)

Total potential value: $10,000–$15,000+ in combined credits annually for an eligible family.

This is why filing taxes — even when you owe nothing or only owe little — can be one of the most financially significant actions a low-income working family takes each year. Free filing options through IRS Free File and the VITA program (Volunteer Income Tax Assistance) help ensure you claim everything you're entitled to.

Filing requirements for tax credits

To claim refundable tax credits, you must file a federal tax return — even if your income is below the standard filing threshold.

For the EITC, you must file Schedule EIC (for qualifying children) along with Form 1040. For the CTC and ACTC, complete Schedule 8812.

Free filing options:

• IRS Free File: Free federal filing through IRS partners if your AGI is under approximately $84,000.
• IRS Direct File: Free direct-from-IRS filing now available in many states.
• VITA program: Free in-person tax help for filers under $67,000 income, persons with disabilities, and limited English speakers.
• AARP Tax-Aide: Free help, especially for taxpayers 50+.

For more detail, read our tax season benefits guide.

What changed under OBBBA

The One Big Beautiful Bill Act signed July 4, 2025 made several changes affecting 2026 tax credits:

• CTC increased to $2,200 per child (from $2,000), with corresponding adjustments to the refundable portion.
• Phaseout thresholds adjusted for inflation in the CTC and EITC.
• Various adjustments to other tax provisions affecting credit interaction.

For the most current implementation details, consult IRS.gov or a qualified tax professional.

Frequently asked questions

Can I get the EITC if I don't have kids?

Yes — up to $632 in 2026. You must be 25–64 (with some exceptions), have earned income, and meet the income limits.

Does receiving the EITC affect my SNAP or Medicaid?

No. Federal tax refunds, including the EITC and CTC, are excluded from income for SNAP and Medicaid eligibility for at least 12 months after receipt.

What if I file my taxes late?

You have up to three years to file a return and claim refundable credits. After three years, the right to the refund is forfeited.

Can I get the CTC if my child has an ITIN instead of SSN?

Under current rules, the child must have an SSN. ITIN-holding children may qualify for the smaller Credit for Other Dependents ($500 per dependent) but not the full CTC.

How long does it take to get my refund?

Tax returns claiming the EITC or ACTC are required by law to be held until mid-February. Direct deposit refunds typically arrive within 21 days of filing. Paper checks take longer.

What if I made a mistake on a prior year's return?

File Form 1040-X (Amended Return) within three years. Many filers leave money on the table by not amending after realizing they missed credits in prior years.