Tax Filing Season Is Around the Corner: Tax Credits Every Family Should Know

Tax filing season is just weeks away, and with it comes important changes that could affect your return, especially if you’re claiming tax credits or filing with dependents. Whether you’re a parent, a worker filing for the first time in a while, or someone who enjoys getting a tax refund, understanding this year’s updates alongside key tax credits can help you make the most of your tax filing.

Planning ahead gives you a better shot at maximizing refunds, avoiding mistakes, and ensuring you take advantage of every credit available under current tax law. Here’s what’s new this year and what you should know about major tax credits before filing your return.

What’s New This Tax Season

This tax season brings some noteworthy updates from the IRS that reflect changes in income thresholds, credit limits, and eligibility rules. One of the most significant shifts affects income brackets and phase-out ranges, meaning more taxpayers may qualify for credits they didn’t qualify for last year.

For example, inflation adjustments have increased the income limits for several credits, including the Earned Income Tax Credit and Child Tax Credit. These changes are designed so that credits remain meaningful despite rising cost of living. Additionally, the IRS has updated its guidelines for digital asset transactions — such as cryptocurrency — requiring clearer reporting, and taxpayers who sold, exchanged, or used crypto in 2025 should ensure those transactions are included correctly on their returns.

Another recent update affects the threshold for standard deductions and expanded eligibility for certain education benefits. If you used education credits in prior years, be sure to review the updated income cut-offs, because adjustments may change how much credit you are allowed to claim.

Understanding Tax Credits and Why They Matter

Tax credits reduce the amount you owe to the IRS directly, dollar for dollar, making them more powerful than deductions, which simply lower taxable income. For example, a $1,000 tax credit lowers what you owe by $1,000, whereas a $1,000 deduction only reduces taxable income—ultimately reducing your tax by a portion of that amount.

Some credits are refundable, meaning even if you owe little or no tax, you could still receive part or all of the credit as a refund. This refundability is particularly helpful for low- to moderate-income families and workers who rely on refunds to cover essential expenses.

The Child Tax Credit: What’s Different This Year

The Child Tax Credit (CTC) continues to be one of the most valuable credits for families with children. For this tax season, income phase-out thresholds have increased slightly due to inflation adjustments, meaning more families may qualify for the full credit than in previous years. Parents with qualifying children under age 17 can claim up to $2,000 per child.

A portion of the credit is refundable through the Additional Child Tax Credit, allowing families to receive money back even if they owe little in federal taxes. However, claiming this credit remains dependent on meeting eligibility rules, including residency and support tests for each child.

Keep in mind that the IRS continues its efforts to reduce improper payments, so ensure that all Social Security numbers and dependent information are accurate to avoid delays in processing or refund issuance.

Earned Income Tax Credit: Expanded Reach This Season

The Earned Income Tax Credit (EITC) is an important credit for low- to moderate-income workers, including those without children. For the upcoming season, the income limits and credit amounts have been adjusted upward, which could allow more taxpayers to qualify or to receive larger credits than in the previous filing year.

Because the EITC is often overlooked, it’s worth paying special attention to your earned income calculations, including any self-employment or gig economy earnings. You may be surprised how much this credit can positively impact your refund.

Child and Dependent Care Credit: Updates You Need to Know

If you paid for childcare so you could work or look for work, the Child and Dependent Care Credit may provide significant relief. This credit helps offset the cost of care for children and certain other dependents, such as elderly family members who live with you.

Recent tax guidance clarified which expenses qualify and how much you can claim, so be sure to keep detailed records of all care payments. Because eligibility rules and limits have changed slightly this season, reviewing the updated IRS guidelines can prevent missed opportunities to claim the credit.

Education Tax Credits: Adjustments to Be Aware Of

Education credits, such as the American Opportunity Tax Credit and the Lifetime Learning Credit, remain available to qualifying taxpayers. These credits help cover the cost of college tuition and eligible education expenses.

This season, income limitations for these credits have been raised moderately, but you still cannot claim both credits for the same student in the same tax year. Choosing the correct credit based on your education expenses and filing status can optimize your tax savings.

Common Filing Mistakes and How to Avoid Them

Even minor errors on your tax return can delay your refund or create unnecessary headaches. Frequent issues include incorrect Social Security numbers for dependents, missing income from side jobs or contract work, or misreporting credit eligibility.

Filing electronically and reviewing every section of your return before submission helps catch errors early. For more complex situations—such as self-employment income, capital gains, or cryptocurrency transactions—consider using reputable tax software or consulting a professional tax preparer.

Final Thoughts

This upcoming tax filing season brings meaningful changes to income limits, credit amounts, and reporting requirements that may benefit many taxpayers. By understanding what’s new and focusing on key tax credits like the Child Tax Credit, Earned Income Tax Credit, and education benefits, you can make informed choices that might increase your refund or reduce your tax bill.

Staying informed and preparing early gives you the best chance of maximizing your benefits while avoiding common mistakes. With thoughtful planning, you can make this tax season one of your most successful yet.