Miscellaneous Tax Credits

Miscellaneous tax credits are a category of federal tax credits available to individuals and businesses that do not fall into the primary credit categories of child-related, education, or healthcare coverage credits. They reduce your tax liability directly, dollar for dollar, rather than reducing taxable income. Some are refundable, meaning they can generate a refund even if you owe no tax. Most are nonrefundable, meaning they reduce your tax to zero but no further.

The IRS publishes the full list of available credits at IRS.gov, and the 2025 tax year introduced several notable changes under the One Big Beautiful Bill, which modified or accelerated the expiration of certain credit provisions.

Key Miscellaneous Credits for Individuals

Several credits outside the core household categories apply to a significant number of taxpayers.

• Saver's Credit (Retirement Savings Contributions Credit): Available to low-and-moderate income taxpayers who contribute to an IRA, 401(k), or other qualifying retirement plan. The maximum credit is $1,000 for single filers and $2,000 for married couples filing jointly.
• Adoption Tax Credit: Covers qualified expenses related to adopting an eligible child. The maximum credit for tax year 2025 is $17,280 per child, with a phase-out for taxpayers with modified adjusted gross income above $259,190. For 2025, up to $5,000 of the credit became refundable for the first time under the One Big Beautiful Bill.
• Foreign Tax Credit: Prevents double taxation by offsetting U.S. taxes with income taxes paid to a foreign government on income that is also taxable in the United States.
• Credit for the Elderly or Disabled: A small nonrefundable credit for taxpayers over age 65 or those retired on permanent disability who meet income requirements.
• Mortgage Credit Certificate: Available to holders of a Mortgage Credit Certificate issued by a state or local housing authority. The credit reduces federal tax owed based on a percentage of mortgage interest paid, directly subsidizing homeownership costs for eligible buyers.

Key Business Credits

Businesses access miscellaneous credits primarily through Form 3800, the General Business Credit, which aggregates multiple credit calculations into a single combined filing.

• Work Opportunity Tax Credit: Available to employers who hire and retain workers from certain targeted groups including veterans, formerly incarcerated individuals, and long-term unemployment recipients. The credit can reach up to $9,600 per eligible hire for certain qualifying veterans.
• Employer-Provided Childcare Tax Credit: Available for businesses that pay expenses to provide or contract qualified childcare facilities or services for their employees. The One Big Beautiful Bill raised the maximum annual credit from $150,000 to $500,000 beginning in tax year 2026, with $600,000 available to eligible small businesses.
• Small Employer Pension Plan Startup Credit: For self-employed individuals and small businesses starting a new qualified retirement plan such as a SEP, SIMPLE IRA, or 401(k).

Energy Credits That Changed in 2025

The One Big Beautiful Bill significantly altered energy-related credits. The Residential Clean Energy Credit, which covered 30% of costs for solar panels, solar water heaters, and geothermal systems, was terminated for expenditures made after December 31, 2025. The Energy Efficient Home Improvement Credit also expired for improvements made after that date. Taxpayers who acted before the cutoff could still claim these credits; those who waited lost the opportunity.

Refundable vs. Nonrefundable: A Critical Distinction

Knowing whether a credit is refundable changes how valuable it is to you.

A nonrefundable credit reduces your tax owed but stops at zero. If you owe $800 in tax and have a $1,500 nonrefundable credit, your tax becomes zero but you do not receive the remaining $700. A refundable credit has no such floor: the same scenario would produce a $700 refund. The Earned Income Tax Credit, the Additional Child Tax Credit, and the American Opportunity Tax Credit (partially) are refundable. The Saver's Credit and the Foreign Tax Credit are generally nonrefundable.

Sources

• https://www.irs.gov/credits-and-deductions-for-individuals
• https://www.irs.gov/newsroom/tax-credits-for-individuals
• https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions
• https://www.irs.gov/newsroom/taxpayers-could-see-a-change-in-their-2025-tax-bill-or-refund