To know if you have tax credits, check your prior year's tax return (Form 1040) for credit line items, use the IRS's Interactive Tax Assistant and credit-specific tools (like the EITC Assistant), review IRS.gov for common credit categories (education, energy, family), and look for IRS notices or letters (like Letter 6419 for Child Tax Credit) or your tax software's summary.
You may be eligible for a California Earned Income Tax Credit (CalEITC) up to $3,756 for tax year 2025 as a working family or individual earning up to $32,900 per year. You must claim the credit on the 2025 FTB 3514 form, California Earned Income Tax Credit, or if you e-file follow your software's instructions.
To know if you received the Earned Income Credit (EIC), check Line 27 on your Form 1040 (or specific lines on older forms like 1040A) for a positive amount, use your tax software's summary, or log into your IRS Online Account to view your tax transcript, which confirms credits applied to your return. If you see an amount on Line 27 (or similar line) and it's part of your refund, you received the EIC.
A tax credit is a deduction off your tax payable. This means that your contributions to a medical aid, as well as a portion of your 'qualifying expenses' (certain medical related spend), is converted to a tax credit, which is deducted from your overall tax liability (the amount of tax you have to pay SARS).
You can do some research online or visit the IRS website to find a list of tax credits and check whether or not you're eligible for any of them. You can also work with a tax expert or use tax software like TurboTax to quickly and easily determine whether you qualify for any tax credits.
Tax credits ended on 5 April 2025. No more payments will be made. You'll have been sent a letter if you are eligible for Universal Credit or Pension Credit instead.
Here are credits you can claim:
Tax credits are amounts you subtract from your bottom-line tax due when you file your tax return. Most tax credits can reduce your tax only until it reaches $0. Refundable credits go beyond that to give you any remaining credit as a refund. That's why it's best to file taxes even if you don't have to.
Tax credits reduce the amount of income tax you owe, allowing you to keep more of your hard-earned money. For most people, this is a good thing.
Tax credit income limits vary significantly by credit (like EITC, Child Tax Credit, AOTC) and depend on filing status and family size, generally using Modified Adjusted Gross Income (MAGI) thresholds, with common examples for 2025 showing phase-outs starting around $200k for Child Tax Credit and specific MAGI caps for AOTC (e.g., $80k single/$160k joint) and EITC ($68.6k single/$61.5k MFJ for 2025). Higher income typically reduces or eliminates credits, while lower incomes may qualify for programs like the EITC or Housing Credits.
No, you have to have some amount of earned income to claim the credit. The limitation is that your wages and earnings must be below a certain amount…not that you have no income.
Without a qualifying child. Recently divorced, unemployed or experienced other changes to their marital, financial or parental status. Below the filing requirement with earnings. Not proficient in English.
To know if you received the Earned Income Credit (EIC), check Line 27 on your Form 1040 (or specific lines on older forms like 1040A) for a positive amount, use your tax software's summary, or log into your IRS Online Account to view your tax transcript, which confirms credits applied to your return. If you see an amount on Line 27 (or similar line) and it's part of your refund, you received the EIC.
If your adjusted gross income is greater than your earned income your Earned Income Credit is calculated with your adjusted gross income and compared to the amount you would have received with your earned income. The lower of these two calculated amounts is your Earned Income Credit.
Once you've confirmed eligibility, call the Tax Credit Helpline on 0345 300 3900. They'll send you an application form to complete with all your relevant details. Fill in all sections of the form with accurate information about your income, working hours, and family circumstances.
The EITC is targeted at low-income workers. The majority of those benefits accrue to people with an adjusted gross income (AGI) under $30,000, and about a third of benefits accrue to people with an AGI under $15,000. The ACTC is a portion of the Child Tax Credit which is refundable. The maximum ACTC for 2024 is $1,700.
Tax credit income limits vary significantly by credit (like EITC, Child Tax Credit, AOTC) and depend on filing status and family size, generally using Modified Adjusted Gross Income (MAGI) thresholds, with common examples for 2025 showing phase-outs starting around $200k for Child Tax Credit and specific MAGI caps for AOTC (e.g., $80k single/$160k joint) and EITC ($68.6k single/$61.5k MFJ for 2025). Higher income typically reduces or eliminates credits, while lower incomes may qualify for programs like the EITC or Housing Credits.
A tax credit doesn't reduce your taxable income. Instead, it lowers the amount of taxes you might otherwise owe.
Key takeaways
A tax credit directly reduces how much you owe in taxes. A tax deduction, on the other hand, reduces your taxable income. Tax credits can provide more tax relief than tax deductions in the same amount.
California Earned Income Tax Credit (CalEITC)
Universal credit has replaced tax credits for most people. But some people are still recieving tax credits, and some people can still apply for tax credits. If you are still receiving tax credits, you may still get a tax credit overpayment.
Have earned income of at least $1 and not more than $32,900. Have a valid Social Security Number or Individual Taxpayer Identification Number (ITIN) for you, your spouse/RDP, and any qualifying children. Live in California for more than half the filing year.