My neighbor Sandra called me in a panic last February. She had just filed her taxes and her refund came back at $312. “Something feels off,” she said. She was right. After spending an hour walking through her return together, we discovered she had completely skipped over the Earned Income Tax Credit — a refundable credit she had qualified for all along. Her corrected refund? Just over $5,400. She had been leaving that money behind for three consecutive years.
Sandra’s situation is not unusual. According to the IRS EITC Central, approximately 20 percent of eligible taxpayers fail to claim the Earned Income Tax Credit each filing season. Multiply that across millions of households and you’re looking at billions of dollars that never reach the people who earned it.
This isn’t just about the EITC, either. The Child Tax Credit, the Additional Child Tax Credit, the Child and Dependent Care Credit, and the Premium Tax Credit all carry significant dollar values — and all are frequently overlooked or misunderstood. With the April 15, 2026 filing deadline behind us and the extension period still open, there is still time for many filers to amend a return or file late and recover what’s owed to them.
The Scale of the Problem: What the Numbers Actually Show
The Earned Income Tax Credit has existed since 1975, yet after more than five decades it remains one of the most under-claimed benefits in the federal tax code. The IRS publishes participation data annually, and the pattern is consistent: lower-income workers, recent immigrants who have become eligible, and adults who recently had a qualifying child all tend to miss it at disproportionate rates.
For the 2025 tax year, the EITC phases in based on earned income and scales with family size. A single filer with no children can claim up to $649. A married couple filing jointly with three or more qualifying children can receive up to $7,830. The income thresholds have been adjusted for inflation — for 2025, a married couple with three children can earn up to $66,819 and still qualify, according to IRS EITC tables.
What makes this credit particularly powerful is that it is refundable. That means if the credit exceeds the taxes you owe, the IRS sends you the difference as a direct refund. You don’t need to owe anything to benefit.
Why Eligible Filers Keep Missing These Credits
Tax professionals and policy researchers point to a consistent set of reasons that explain why so many eligible Americans walk away empty-handed. The first is complexity. The EITC has a phase-in range, a plateau, and a phase-out range — and the rules around qualifying children involve age, relationship, residency, and joint return tests. For someone doing their own taxes for the first time, it reads like a legal document.
The second barrier is self-disqualification. Many filers assume their income is too high, too low, or the wrong type. Self-employment income, gig work, and freelance earnings all count as earned income for EITC purposes — something a surprising number of workers don’t know. Conversely, people who received unemployment benefits or Social Security as their only income stream correctly do not qualify, but workers who had even a small amount of W-2 earnings alongside those benefits may still be eligible.
The third issue is software errors or skipped prompts. Many free and commercial tax prep platforms ask about qualifying credits through a series of interview-style questions. If a filer clicks through quickly, answers a question too conservatively, or doesn’t understand what a “qualifying child” means under IRS rules, the software may skip the credit entirely with no warning.
The Other Credits That Frequently Fall Through the Cracks
The EITC gets most of the attention, but it isn’t the only credit leaving money behind. Three others consistently show up in overlooked-refund data and deserve a closer look.
The Child Tax Credit (CTC) offers up to $2,000 per qualifying child under age 17. Up to $1,700 of that is refundable as the Additional Child Tax Credit for the 2025 tax year, meaning families who owe little or no tax can still receive a check. The income phase-out begins at $200,000 for single filers and $400,000 for married couples filing jointly — meaning many middle-income families still qualify but assume they earn too much.
The Child and Dependent Care Credit is designed for working parents and caregivers who pay for childcare, after-school programs, or adult dependent care so they can work or look for work. It covers between 20 and 35 percent of eligible expenses, up to $3,000 for one dependent or $6,000 for two or more. This credit is non-refundable, but it can still meaningfully reduce what you owe.
The Premium Tax Credit helps individuals and families who purchased health insurance through the federal or state marketplace under the Affordable Care Act. If your income fell during 2025 — a job loss, a pay cut, a business slow period — your actual credit may have exceeded what was advanced to you during the year, leaving a reconciliation balance in your favor on your return.
What to Do Right Now If You Think You Missed a Credit
The path forward depends on your situation. If you haven’t filed at all for 2025, file as soon as possible — even late. The IRS does not penalize late filing when you are owed a refund, only when you owe taxes. Refundable credits like the EITC and ACTC are yours to claim regardless of when you file, as long as you do so within the three-year window.
If you filed through a tax preparer and believe they missed a credit, contact them first. Many preparers will file an amendment at no charge if the error was on their end. If you used software, check whether the platform has a “review” or “audit” feature that re-checks for credits you may have skipped.
The Bigger Picture: Why Unclaimed Credits Matter Beyond the Individual Refund
Tax credits like the EITC function as one of the largest anti-poverty programs in the United States. The Center on Budget and Policy Priorities has estimated that the EITC and Child Tax Credit together lift millions of children above the poverty line annually. When those credits go unclaimed, the economic stabilization effect the government intended never materializes for those households.
For individual families, the gap between claiming and not claiming can be the difference between paying off medical debt, covering a car repair, or simply having a financial cushion heading into summer. The average EITC refund for recipients with children runs in the range of $3,000 to $4,000 annually — real money that can shift a family’s financial footing in meaningful ways.
Tax policy advocates have long pushed for automatic credit enrollment — a system where the IRS pre-populates returns with credits it already has data to confirm. While that reform hasn’t been enacted at the federal level, several states have moved toward simplified filing systems that reduce the burden on lower-income filers. Until federal reform arrives, the responsibility largely falls on individual filers to know what they’re owed.
What’s Next for These Credits in 2026 and Beyond
Congressional discussions around the Child Tax Credit have been ongoing. Provisions from the Tax Cuts and Jobs Act that set the current $2,000-per-child CTC are scheduled to change after 2025, and the exact outcome depends on legislative action that was still unresolved as of early 2026. Filers should monitor IRS guidance and reputable tax policy sources for updates that could affect the 2026 tax year return you’ll file in 2027.
On the EITC side, the credit is indexed to inflation each year, so the maximum values tend to inch upward. There have been ongoing proposals in Congress to expand the EITC for workers without qualifying children — currently the least generous tier of the credit — but no final expansion has been signed into law as of this writing.
For now, the most actionable step for anyone reading this is simple: verify your eligibility before assuming you don’t qualify. Use the IRS EITC Assistant, gather last year’s income documents, and take twenty minutes to confirm whether money is owed to you. Sandra got $5,400 back. The question is whether you’re leaving a similar amount behind.
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