Do you know about the refundable tax credit? They are the tax credits offered by the US federal government and can be refunded through the tax return.
They are refunded only if the tax liability is zero or the money a taxpayer owes is less than the eligible credit. The IRS has released the details about them.
For tax year 2025, there are a total of five tax credits that are refundable. Here, we have discussed how much it is, who can claim it, and what it requires for claiming.
IRS Refundable Tax Credits
For the tax year 2025 (filed in 2026), there are a total of six refundable tax credits, out of which three are fully refundable and three are partially refundable. They are as follows:
- Earned Income Tax Credit
- Child Tax Credit
- American Opportunity Tax Credit
- Premium Tax Credit
- Adoption Tax Credit
- Fuel Tax Credit
Earned Income Tax Credit
In 2026, EITC is available for low- to moderate-income earners. By claiming this tax credit, one gets a maximum refund of $8,046. The credit depends on the number of qualifying children.
For claiming this tax credit, it is mandatory you are a US citizen, have a valid SSN, your investment income shouldn’t be above $11,950, and your AGI shouldn’t be above the thresholds:
- 0 children (Single / HOH / Widowed: $19,104 & Married Filing Jointly: $26,214)
- 1 child (Single / HOH / Widowed: $50,434 & Married Filing Jointly: $57,554).
- 2 children (Single / HOH / Widowed: $57,310 & Married Filing Jointly: $64,430).
- 3 or more children (Single / HOH / Widowed: $61,555 & Married Filing Jointly: $68,675).
In order to get the refund, make sure you attach Schedule EIC, if you have any qualifying children, with your federal tax return for the tax year 2025.
Child Tax Credit
For the tax year 2025, the CTC is $2,200 for each child under the age of 17 years. It is partially refunded; the maximum for each child one gets as a refund is $1,700. If you have more than one child, you can expect a bigger payout.
In order to claim this tax credit, it is mandatory that you are a US citizen, have at least one child (who can be your son, daughter, or any relative) under the age of 17 as of December 31, 2025, and have lived more than half of 2026 with you.
To claim it, one is required to file a federal tax return with Schedule 8812. Note that the credit starts to phase out if the AGI exceeds $200,000 and $40,000 for singles and couples, respectively; for each $1,000, the credit is reduced by $50.
American Opportunity Tax Credit
In 2026, AOTC can be claimed by a college-going student. The maximum credit is $250, and it is partially refunded. The refund you can get is 40% of the credit you are eligible for, which means you can get up to $1,000 as a refund.
To claim it, you must have qualified education expenses, and you must meet eligibility requirements and income limits. They are given below:
- You are a US citizen and reside in any state or territory.
- You are completing any four-year degree course.
- You have no felony drug conviction.
- You have a valid Social Security Number.
Additionally, your income for 2025 should be between $80,000 and $160,000 if filing as single or head of household and married filing jointly, respectively. To avail the benefit of this tax credit, it is mandatory to file federal tax returns with Form 8863.
Premium Tax Credit
In 2026, the PTC will help with the cost of insurance bought from the health insurance marketplace. The amount depends on your income, family size, and health plan cost.
To find the premium tax credit, you need to deduct your expected contribution from the cost of the benchmark health plan. To qualify for it, you are required to meet the following eligibility criteria:
- You are in the US and must have marketplace health insurance.
- Your household income must be between 100% and 400% of the Federal Poverty Level (FPL).
In order to avail the benefit of this tax credit in 2026, filing the federal tax return with Form 8962 is required.
Adoption Tax Credit
In 2026, it is partially refunded. It is for the taxpayers who adopted an eligible child in the calendar year 2025. The maximum credit is $17,280 for each qualifying child, out of which a maximum of $5,000 can be received as a refund.
To claim the ATC, it is mandatory that you are a citizen of the US and have adopted a child under age 18 who is physically or mentally incapable of self-care. The modified adjusted gross income is $259,190 to get full credit.
If the MAGI is above the threshold, it starts to phase. A taxpayer with MAGI of $299,190 or more isn’t eligible to avail the benefit of this tax credit. To get the benefit of the Adoption Tax Credit, you need to file a federal return with Form 8839.
Fuel Tax Credit
In 2026, the FTC can be claimed by taxpayers who paid federal excise taxes on fuel used for qualified non-highway or off-road purposes. The amount depends on the type of fuel, gallons used, and federal tax rate on that fuel.
The rate for gasoline is 18.4¢ per gallon, and for diesel, it is 24.4¢ per gallon. To claim this tax credit, it is mandatory that you used to buy fuel for farming purposes, off-highway business use, boats or vessels, or certain nonprofit or government uses.
In order to avail yourself of the benefit of the Fuel Tax Credit for the tax year 2025, you need to file Form 4136 (Credit for Federal Tax Paid on Fuels) with the federal tax return.
Disclaimer: Refundable tax credit details for the 2026 tax season are for informational purposes only. Official rules and eligibility are determined by the IRS.
