Tax Credits for Single Mothers

IRS Free File  is open now. It allows taxpayers with an Adjusted Gross Income of $84,000 or less to use tax preparation software for free.

For millions of American families — especially those headed by single women, tax season is full of stress and number crunching.

There are, however, some useful tax credits that can significantly lower the amount of taxes to pay. And, in some cases, give cash refunds to families in jobs that pay too little to live on.

Claiming a tax credit is like putting money back in your pocket, and for single mother, this can make a real difference to the bottom line.

In fact, at tax time, being a parent comes with certain perks.

For example, if you are a single mother of two earning less than $57,310, you could claim up to $7,152 in EITC, up to $4,400 in Child Tax Credit, plus as much as $6,000 spent on care expenses.

Personal & Dependent Exemption

Personal exemption has been suspended.

The Tax Cuts and Jobs Act of 2018 (TCJA) has suspended all personal and dependent exemptions for tax years 2018—2025.

For the 2018 tax year and beyond, you can no longer claim  a personal exemption for yourself, your spouse, or your dependents.

Filing Taxes as a “Head of the Household”

As a single mother and the sole breadwinner in the family, the first thing you must do is to select “Head of the Household” as your filing status. ¹ That’s how to get the biggest tax return as a single mom compared to single filers.

Filing as “Head of Household” has two benefits. First, you’ll pay less taxes overall; and second, you’ll also be able to claim a larger tax exemption.

What is the head of household deduction for 2025?

For tax year 2025, taxpayers who use the head of household filing status may receive an $23,625 annual standard deduction. In comparison, a single filer is only entitled to a $90,000 standard deduction.

Earned Income Tax Credit

EITC, the Earned Income Tax Credit is a tax benefit designed primarily to help low- to moderate-income individuals and families whose earned income falls below a certain limit.

It isn’t a welfare handout per se. Only people who work and pay taxes can claim it; creating an incentive for them, including many who are poor, to leave welfare for work. ²

The EITC is “refundable,” which means that when EITC exceeds the amount of taxes owed, it results in a tax refund, whose amount varies by income, family size and filing status.

EITC FAQ

What is the maximum income to qualify for earned income credit 2025?

Depending on your filing status and number of qualifying children, you might be eligible for the credit on your 2025 federal tax return if your income is under $68,675. ³

How do I know if I’m eligible for EITC?

If you are not sure, use the EITC Assistant  to check your eligibility, estimate your potential credit, and see whether any of your children or family members qualify as dependents.

How much is the Earned Income Tax Credit for 2025?

For the 2025 tax year, the earned income credit ranges from $649 to $8,046, depending on your filing status and how many children you have.

Single parents with two children under age 19 who made less than $57,310 are eligible for a refundable credit of up to $7,152.

In contrast, couples with no dependent children earning less than $26,214 can receive no more than $649.

Which states have EITC?

Thirty one (31) states and the District of Columbia, as well as New York City, offer their own version of Earned Income Tax Credits to complement the federal credits — applying a percentage match to the federal allocation.

How long does it take to get my tax refund?

People who e-filed their returns typically receive their refunds in less than 21 days. For paper filers, this can take much longer. The PATH Act, passed in 2015, stipulates that the IRS must withhold refunds until February 15^th.

So if you file a paper return before February 15^th, you’re owed a tax refund and you’re claiming either the ACTC or EITC, your entire refund will be withheld until at least the February 15^th deadline.

The IRS has eliminated the guesswork of waiting for your tax refund by creating IRS2Go , an app that allows you to track the status of your return. You can also check the status of your refund with the Where’s My Refund?  online portal.

Child Tax Credit

If you have a child under age 17 who is claimed as your dependent and has a valid Social Security number, there is a good chance you qualify for the Child Tax Credit.

The credit amount is up to $2,200 per eligible child, but it phases out based on modified adjusted gross income (MAGI) levels. This means high earners may receive a smaller credit or be ineligible.

For example, the Child Tax Credit begins to phase out once your MAGI exceeds $400,000 if you are married filing jointly, or $200,000 for all other filing statuses.

In other words, a single mom with income below $200,000 may be eligible to claim up to $2,200 for each qualifying child when filing under the Head of Household status.

Additional Child Tax Credit

If the credit exceeds taxes owed, families may receive up to $1,700 per child as a refund, known as the Additional Child Tax Credit (ACTC) or refundable CTC.

Families whose credit exceeds their tax liability can receive the remainder of the credit in the form of a refund not exceeding 15% of their earnings above $2,500. ⁴

For example, a single mother with two children who earns $14,000 in 2025 could receive 15% of $11,500, or $1,725, or roughly $850 per child, as a refund.

Child and Dependent Care Credit

Paid a local daycare center to take care of your kid? Did you pay someone to care for your child so that you could work or actively look for work?

If you did, you might be eligible for the Child and Dependent Care Credit, a tax break specifically for working people to help offset the costs associated with caring for a child under the age of 13 or dependent with disabilities.

To qualify, in addition to the above, you must:

• Live in the U.S. for more than half of the year, and
• Care for a dependent under age 13, a spouse or a dependent of any age who is unable to care for themselves.

Eligible expenses may include payments to daycare centers, babysitters, after-school programs, and certain in-home caregivers.

What is the maximum dependent care credit for 2025?

Starting in 2026, the CDCC may reimburse up to 50% of your eligible expenses. For example, a taxpayer earning $15,000 or less is eligible for a maximum credit worth 50%.

The credit is worth up to 20%—35% of your eligible expenses, with a maximum credit of $3,000 for one qualifying child and $6,000 for two or more, depending on your income.

For incomes between $15,000 and $43,000, the credit percentage decreases by one percentage point for every $2,000 of AGI. ⁵

To claim child and dependent care credit, complete and attach Form 2441 and Schedule 3 to your return. You must file taxes using either Form 1040 or Form 1040A to claim the credit.

Education Tax Benefits

There are two (2) tax credits available to help you offset the costs of higher education by reducing the amount of your income tax. They are the American Opportunity Credit and the Lifetime Learning Credit.

If you are eligible for both the American Opportunity Credit and the Lifetime Learning Credit, you can choose to claim either credit, but not both.

American Opportunity Tax Credit

The American Opportunity Credit is a tax credit of up to $2,500 of the cost of tuition, fees and course materials, which can be claimed for expenses for the first four (4) years of post-secondary education.

Benefit Amount

$2,500 tax credit per student ⁶
40% of credit may be refundable; the rest is nonrefundable
Limit: First 4 years of post-secondary education

Lifetime Learning Tax Credit

Unlike the American Opportunity Credit, the Lifetime Learning Credit is “non-refundable” so the maximum credit is limited to the amount of tax you owe. There is, however, no limit on the number of years for which you can claim a Lifetime Learning Credit.

Benefit Amount

$2,000 tax credit per student ⁷
Non-refundable — credit limited to the amount of tax you must pay on your taxable income
Unlimited number of years

Student Loan Interest Deduction

Under the law, you’re allowed a tax deduction for the interest paid on qualified student loans, including private student loans that you took out for yourself, your dependent or your spouse.

If you meet the eligibility criteria, you may deduct either $2,500 in student loan interest or the actual amount of loan interest you paid during the year — whichever is less.

FAQ

Can you still claim student loan interest on taxes?

Yes. The most student loan interest you can claim as a tax deduction is limited to $2,500 as of the 2025 tax year.

What is the income limit for student loan interest deduction?

The limit of the amount of income you can make and still qualify for the student loan interest deduction, based on your filing status, for the 2025 tax year is $90,000 if single or $180,000 if married filing jointly.

Can a co-signer deduct student loan interest?

Yes, a parent who co-signed student loans may claim the student loan interest deduction too as long as the student is a dependent of the co-signer.

What is IRS Form 1098-E?

IRS Form 1098-E is the Student Loan Interest Statement that your federal loan servicer will use to report student loan interest payments to both the Internal Revenue Service (IRS) and to you.

Get Help with Your Taxes

Interactive Tax Assistant

If you have tax questions, you should check out the Interactive Tax Assistant  on IRS.gov. This tool provides answers to a number of tax questions. It can help determine if a type of income is taxable, if you’re eligible to claim certain credits, and if you can deduct expenses on your tax return.

Volunteer Income Tax Assistance (VITA)

The IRS offers free tax preparation through a program called Volunteer Income Tax Assistance (VITA). These sites are usually open from the end of January through April 15.

In addition to VITA, the Tax Counseling for the Elderly (TCE) program also offers free tax help for all taxpayers, particularly those who are 60 and older, specializing in questions about pensions and retirement-related issues unique to seniors.

To locate the nearest VITA or TCE site near you, call
(800) 906-9887

Low-Income Taxpayer Clinic

Funded by the IRS, Low Income Taxpayer Clinics (LITCs) represent low income individuals in disputes with the IRS — for free or for a small fee, including audits, appeals, collection matters, and federal tax litigation.

No application is needed to utilize this service. Each LITC will determine if you meet the income guidelines and other criteria before it will agree to represent you.

If you believe you’re eligible — and in need of help with tax matters, find the clinic  nearest you and call the numbers listed on the list for an appointment.