5 Tax Breaks Worth Claiming if You Made Under $100K Last Year
If your annual income is less than $100,000, you’re in good company. According to the Federal Reserve, more than half of all American households earn under $100,000 a year. Whether your income falls just shy of — or well below — that threshold, you may wish your earnings were higher. Still, earning under $100,000 can come with some meaningful advantages at tax time.
For You: 3 Ways Taxes Have Changed in the Last 20 Years -- and How It Benefits Middle-Class Filers
Learn More: 5 Signs You’re Losing Money Every Month — and How To Find the Leaks
With earnings below $100,000, you may be eligible for certain income-based tax credits and deductions that can lower your tax bill or boost your refund. You just have to know where to look. Since MoneyLion knows tax season already comes with enough stress, we rounded up several tax breaks that tend to favor lower- and middle-income filers.
1. Earned Income Tax Credit (EITC)
Low- to moderate-income families should explore the Earned Income Tax Credit (EITC), a refundable credit designed to supplement earnings for people who make a modest income.
For tax year 2025, this credit can range from $649 for a single filer with no children to as much as $8,046 for a family with three or more qualifying children. Of course, income limits vary based on filing status and family size. That said, many households earning under $100,000 will likely qualify for at least a partial credit.
2. Child and Dependent Care Credit
While reviewing their return, working families should also assess eligibility for the Child and Dependent Care Credit.
This credit is essentially what it sounds like: It helps offset out-of-pocket care expenses that allow you (and your spouse, if applicable) to work or look for work. Eligible expenses may include child care, elder care or care for a spouse who cannot care for themselves.
For the 2025 tax year, the Child and Dependent Care Credit can cover between 20% and 35% of qualifying expenses, depending on income. The credit applies to up to $3,000 in expenses for one qualifying dependent or up to $6,000 for two or more.
Caregiving responsibilities extend beyond parenting, and this credit reflects that reality. You could be eligible for this credit if you paid for care for:
A child under age 13 who lived with you for more than half the tax year
A spouse or other dependent, such as an elderly parent, who was physically or mentally unable to care for themselves and lived with you for more than half the year
Since households earning under $100,000 often spend a disproportionate share of their income on care, this tax break can be a massive help.
3. Adoption-Related Tax Credits
If you’re considering adoption, you should know about the federal adoption tax credit, which helps offset qualified expenses such as legal fees, court costs and travel.
Writing for the Mercer Advisors website, Steven Elliott, CPA, describes some of the tax breaks that can help offset costs for adoptive parents.
“In 2025, adoptive parents may claim a federal tax credit for up to $17,280 of ‘qualified adoption expenses’ for each child,” he wrote. “This tax credit directly reduces the amount of tax owed. In July 2025, the One Big Beautiful Bill Act allows up to $5,000 of the credit to be refundable. Previously, the entire amount was nonrefundable. This will help taxpayers with lower income tax liabilities recover more costs associated with adoption.”
Because part of the credit is now refundable, families with lower tax liabilities may be able to recover more of their adoption costs than in prior years.
4. Student Loan Interest Deduction
Student loan payments can feel like a financial millstone around the neck of middle-income earners — and high interest rates certainly don’t alleviate the burden. These earners can get some relief at tax time through the student loan interest deduction.
Eligible filers may deduct the lesser of $2,500 or the amount of interest actually paid during the year. This is an above-the-line deduction, meaning you don’t need to itemize to claim it.
Fidelity explains how income affects eligibility:
“For 2025, the amount of your student loan interest deduction is gradually reduced (phased out) if your MAGI is between $85,000 and $100,000 (or between $170,000 and $200,000 if you file a joint return). You can't claim the deduction if your MAGI is $100,000 or more ($200,000 or more if you file a joint return).”
Because the deduction fully phases out at $100,000 for single filers, it is especially relevant for people earning below that line.
5. The Saver’s Credit
Like many middle-income earners, you’re thinking about your financial future and contributing to a workplace retirement plan such as a 401(k) or IRA. If you’re padding your nest egg, you should ask your tax preparer about the Saver’s Credit — a lesser-known tax break aimed at low- and moderate-income savers.
This nonrefundable credit can be worth up to 50% of your retirement contributions, depending on your income. Fidelity notes:
“Depending on your AGI, you could receive a tax credit of 0%, 10%, 20% or 50% of the first $2,000 ($4,000 for joint filers) that you contribute to eligible retirement accounts,” the team wrote.
While the credit phases out well below $100,000, many workers earning under that threshold still qualify for at least a partial benefit — particularly early- and mid-career savers.
The Bottom Line
If you earned less than $100,000 last year, you may be surprised by how many tax breaks are designed with your income level in mind. If any of these situations apply to you, ask your tax preparer whether you qualify before you file.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal, or tax advice.
More From MoneyLion: