Tax deductions reduce the income you are taxed on. Tax credits reduce the actual tax you owe — dollar for dollar. That makes credits more valuable than deductions of the same size. Yet several credits that seniors commonly qualify for go unclaimed every year, simply because people do not know they exist.
The Earned Income Tax Credit (EITC)
The EITC is one of the largest refundable tax credits available — meaning it can reduce your tax bill to zero and put money back in your pocket even if you owe no taxes. Before 2021, the EITC was only available to workers under age 65. That age cap has been permanently removed. Workers 65 and older with earned income (wages, self-employment) can now claim the EITC if their income falls below the limit.
For 2025, the maximum EITC for a single worker with no children is $649. Income limits for that group are roughly $18,600 for single filers. If you work part-time in retirement and your income is modest, check whether you qualify — many people in this situation do not realize the credit applies to them.
The Credit for the Elderly or Disabled
This credit is specifically for people age 65 and older, or those who retired early on permanent and total disability. The credit ranges from $375 to $1,125 depending on your filing status and income. However, income limits are quite low — for a single filer, the credit phases out completely once your AGI exceeds $17,500, or your nontaxable Social Security plus other nontaxable income exceeds $5,000. As a result, many seniors who might otherwise qualify are phased out. If your income is at the lower end of the range, it is worth checking Schedule R.
The Saver’s Credit
If you are still contributing to a retirement account — a traditional IRA, Roth IRA, or 401(k) — you may qualify for the Saver’s Credit (officially the Retirement Savings Contributions Credit). The credit is worth 10%, 20%, or 50% of your contribution, up to $2,000 per person, depending on your income. For 2025, single filers with AGI up to $36,500 qualify for some level of the credit. This is one of the few credits that rewards saving at low-to-moderate incomes.
The Medical Expense Deduction
Technically a deduction, not a credit, but worth flagging here because it is easy to miss. You can deduct medical and dental expenses that exceed 7.5% of your adjusted gross income. For seniors with significant out-of-pocket health costs — prescription drugs, dental work, hearing aids, glasses, long-term care premiums, Medicare Part B and Part D premiums — this threshold can be crossed. Track your medical spending throughout the year. If you are close to the threshold, consider bunching elective procedures or large purchases into one tax year to push over the limit.
Property Tax Credits and State Credits
Many states offer their own tax credits for older residents — circuit-breaker credits that refund a portion of property taxes paid, renters’ credits, and low-income senior credits. These are separate from federal taxes and vary significantly by state. Check your state’s department of revenue website or ask a tax preparer familiar with your state’s rules. The Senior Property Tax Relief page has more on what states commonly offer.
How to Make Sure You Claim Them
The most reliable way to catch credits you qualify for is to use tax software that walks you through a Q&A, or to work with a tax preparer. Credits like the EITC and the Credit for the Elderly have their own worksheets and income tests that are easy to miss if you fill out a return manually. If you file for free through IRS Free File or a VITA site, the software will screen for these credits automatically. See our guide on filing your taxes for free for options available to you.
This article is for educational purposes only and does not constitute tax, legal, or financial advice. Tax laws change frequently and may vary based on your individual situation. Consult a qualified tax professional before making decisions about your taxes.