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If your income is below the minimum required to file an income tax return, or you don’t expect a refund, you may be tempted to skip it. However, by doing so, you could miss out on several tax credits that may entitle you to a refund—possibly even a check from the Internal Revenue Service (IRS). The minimum income required to file a return depends on factors like your age, filing status, and whether you earned at least $400 from self-employment.
Even if you don’t owe taxes on your earned income, filing a tax return could be worthwhile. Filing may entitle you to a tax credit, potentially leading to a refund. Additionally, filing may be necessary to avoid penalties for late filing or non-filing.
Key Takeaways
- Even if you don’t owe taxes, filing a return may be well worth the effort.
- For tax year 2025, single taxpayers have a standard deduction of $15,000, while married couples filing joint returns have a standard deduction of $30,000. Even if you fall below that, you may be eligible for certain credits that will lead to a tax refund.
- You may be owed a payment through the Earned Income Tax Credit program. For tax year 2025, the maximum credit is increasing from $7,830 to $8,046.
- Other tax credits are available for parents, health insurance costs, and more.
- In any case, if your employment income is low, but you made money in other ways, you may be required to file.
Refund Due: You Had Tax Withheld
Filing a tax return even if your income is below your standard deduction will get you a refund of withholdings, provided that you have no other taxes due. It’s as easy as completing an IRS Form 1040. Many tax preparation services like TurboTax or H&R Block offer free online tools to help you complete the form.
If you’re eligible for one of these five tax refundable credits, it’s worth filing your federal income taxes.
Earned Income Tax Credit (EITC)
The Earned Income Tax Credit (EITC) was created to assist low-wage earners by reducing their tax liability.
Households that qualify for the credit can reduce their tax liability to zero, which means they will owe no income taxes. If your tax obligation is less than the amount of the credit, you may be eligible for a cash refund of the remaining credit amount.
To qualify for the EITC, your earned income and adjusted gross income (AGI) must be below certain income limits. Below are the 2025 EITC limits.
| EITC Income Limits for 2025 Tax Year | |||
|---|---|---|---|
| Number of Children | Income Phaseout Amount (MFJ) | Income Phaseout Amount (Other) | Maximum Amount of Credit |
| 0 | $26,214 | $19,104 | $649 |
| 1 | $57,554 | $50,434 | $4,328 |
| 2 | $64,430 | $57,310 | $7,152 |
| ≥3 | $68,675 | $61,555 | $8,046 |
Child Tax Credit
The Child Tax Credit helps low- to middle-income families by providing a credit for each dependent child. For tax year 2025, the refundable portion of this credit is $1,700. This credit is phased out for higher-income families. To qualify, you must meet certain income requirements.
American Opportunity Tax Credit
The American Opportunity Tax Credit (AOTC) reimburses taxpayers up to $2,500 a year for qualified education expenses.
This credit was recently expanded to allow those who do not owe any taxes to still qualify for a refund. If you paid college tuition or other qualified education expenses, this generous tax credit could provide a nice refund check but is limited to a maximum of four years of eligibility per student.
Health Insurance Marketplace Premium Tax Credit
The premium tax credit, helps low- to moderate-income singles and families cover the cost of health insurance purchased through the Health Insurance Marketplace under the Affordable Care Act (ACA).
To be eligible for the premium tax credit, your household income must be at least 100%—but no more than 400%—of the federal poverty line for your family size. Additional qualifications apply. Visit the IRS website to see if you qualify.
Saver’s Credit
If you contribute to a qualified retirement savings plan, such as a 401(k) or an Individual Retirement Account (IRA), you may be eligible for the Saver’s Credit. This nonrefundable credit allows the lesser of $1,000 ($2,000 if filing jointly) or the amount in taxes you would have had to pay without the credit.
Avoid a Penalty for Not Filing
Even if you didn’t make enough money to meet the IRS minimums to be owed a refund, there are still good reasons to file your federal taxes. For example, if you were self-employed and earned over $400, or if sold your home for a profit, or withdrew money from a retirement account, you may still owe Social Security or Medicare taxes that weren’t withheld.
You could be subject to the alternative minimum tax (AMT), which would require a return to be filed. Filing ensures you avoid IRS penalties and interest on unpaid taxes, including potential back taxes.
Is a Tax Credit a Refund?
A tax credit directly reduces the amount of tax you owe. While it is not a refund itself, a credit can result in a refund if you’ve paid more in taxes than you owe.
What Does Tax Credit Mean?
A tax credit is a concept used by the IRS that reduces a taxpayer’s taxable income. A tax credit usually reduces the amount of taxes you owe for the year.
Is the Child Tax Credit a Refund?
The Child Tax Credit is a per child credit, which reduces your overall taxable income. However, you may receive a refund of up to $1,700 as a result of the Child Tax Credit for the tax year 2025.
The Bottom Line
You should always assume that you should file a tax return, even if you didn’t make enough money to file one—you may be owed substantial tax credits even if your tax bill will be essentially zero. Taking the time to read about the credits available could result in a healthy check from the IRS.