Tax Credits in 2026: What You Need to Know
Child Tax Credit, EITC, education credits, and the traps that create IRS math error notices.
Credits are the highest-value lines on a Form 1040 and the most frequently adjusted by IRS computers. For 2026 the headline amounts moved with inflation. The eligibility tests did not get looser.
Family credits
The Child Tax Credit is $2,200 per qualifying child under 17. Up to $1,700 may be refundable as the Additional Child Tax Credit. Phase-out still starts at $200,000 MAGI ($400,000 joint). Dependents 17 and older may still generate a $500 other-dependent credit, which is not refundable.
EITC maxima for 2026 are $664, $4,427, $7,316, and $8,231 depending on the number of qualifying children. Investment income over $12,200 is a hard stop. If the IRS denied EITC in a prior year, Form 8862 is usually required before you claim it again.
Education
American Opportunity Credit remains $2,500 per eligible student (40% refundable) for the first four years of post-secondary school. Lifetime Learning Credit remains $2,000 per return. You cannot take both for the same student in the same year. Form 1098-T is evidence, not a guarantee — qualified expenses have to be yours, paid, and not paid with tax-free 529 distributions you already excluded.
Energy and vehicles
Residential energy and clean-vehicle credits were rewritten in 2025 legislation. Do not rely on a 2023 blog post about a $7,500 EV credit. Read the current Form 8936 and 5695 instructions, or you will file a credit the IRS has already turned off.
Expat trap
Claiming the foreign earned income exclusion on Form 2555 generally blocks the Additional Child Tax Credit. Families abroad often get a better result with the foreign tax credit so that earned income still supports the refundable CTC.
General information for tax year 2026, not legal or tax advice. IRS programs depend on your filing history, assets, and collection statute. Talk with a representative before you send the IRS money or financials.