When most retirees think about tax savings, they focus on the standard deductions or common exemptions they’ve always claimed. But in retirement, the rules change—and so do your opportunities to reduce your tax bill. While many seniors are aware of benefits like the higher standard deduction for those over 65, there are other, less-publicized tax credits that could put thousands back in your pocket each year. Unfortunately, because these credits are not widely advertised by the IRS or tax software, they’re often overlooked entirely. Missing out on them doesn’t just mean paying more in taxes—it could mean losing money you’re legally entitled to keep.
The truth is, even if your working days are behind you, the tax code still offers incentives for certain expenses and life situations. Some of these credits are specifically designed with seniors in mind, while others apply to all taxpayers but are especially relevant to those in retirement. By learning about these lesser-known opportunities, you can ensure you’re not overpaying when tax season rolls around.
Below are seven tax credits that seniors often miss and how you can take advantage of them before another year slips by.
7 Little-Known Tax Credits That Seniors Often Miss
1. The Credit for the Elderly or the Disabled
Many retirees have never heard of the Credit for the Elderly or the Disabled, despite it being one of the few IRS credits targeted specifically at people over a certain age. If you’re 65 or older—or retired due to a permanent and total disability—you may qualify. The credit can range from $3,750 to $7,500, depending on your filing status, adjusted gross income, and nontaxable Social Security benefits.
One reason it’s so often missed is that eligibility isn’t automatic. You must meet strict income limits, and Social Security benefits play into the calculation in a unique way. For example, a single filer in 2024 generally must have an adjusted gross income below $17,500 to qualify, with some variations. If your income is slightly over the limit, certain deductions—such as medical expenses—might bring you back into eligibility.
Even though it’s not available to everyone, if you fall within the income bracket, this credit can make a meaningful difference in your tax liability. It’s especially helpful for low- to moderate-income retirees who rely heavily on Social Security.
2. The Saver’s Credit for Late-Life Retirement Contributions
You might assume the Saver’s Credit only applies to younger workers building their nest eggs, but that’s not the case. If you’re still contributing to an IRA or a 401(k) in your later years (and meet the income requirements), you can claim the Saver’s Credit even in retirement.
This credit can be worth up to $1,000 for single filers and $2,000 for couples, depending on your income and contribution amount. In 2024, the income limit for singles is $36,500 and for married couples is $73,000. Many semi-retired individuals or part-time workers miss this because they don’t realize they’re still eligible to contribute to retirement accounts—and therefore, still eligible for the credit.
If you have part-time earnings in retirement, consider making even a small IRA contribution to unlock this tax benefit. It’s essentially free money from the IRS for continuing to save.
3. The Energy Efficient Home Improvement Credit
Retirees who own their homes can benefit from this expanded credit for energy-efficient improvements. Whether you install new windows, replace your HVAC system, or upgrade insulation, you may qualify for a credit of up to 30% of the cost, capped at $1,200 annually (or up to $3,200 for certain renewable energy upgrades).
This credit has become more generous in recent years, and it now allows you to claim improvements over multiple years rather than being a one-time deal. Many seniors skip it because they think it’s only for large-scale solar panel projects, but smaller upgrades like replacing an old water heater or adding weatherstripping can qualify too.
If you’ve been considering home improvements that also reduce your utility bills, timing them strategically could give you a tax advantage. It’s a great way to improve your comfort while lowering both energy and tax costs.
4. The Lifetime Learning Credit for Continuing Education
Learning doesn’t have to stop in retirement, and the IRS will actually reward you for it. The Lifetime Learning Credit offers up to $2,000 per year for qualified tuition and fees at eligible institutions. Unlike the American Opportunity Tax Credit, there’s no limit on how many years you can claim it, making it perfect for retirees taking courses for personal enrichment or to start a second career.
Even non-degree courses can qualify, as long as they’re provided by an accredited institution. Many retirees miss this credit because they assume it’s only for young college students. In reality, whether you’re taking online classes from a community college or attending a local university, you could reduce your tax bill while expanding your skills.
The only caveat is that you can’t claim this credit if your modified adjusted gross income exceeds $90,000 for singles or $180,000 for joint filers in 2024.
5. The Credit for Dependent Care Expenses
It might surprise you, but seniors can sometimes claim the Credit for Dependent Care Expenses. While it’s most commonly associated with parents of young children, the definition of “dependent” can also include an adult spouse or relative who is incapable of self-care.
For example, if you’re caring for an ailing spouse or an elderly parent and you pay someone to provide care so you can work part-time or volunteer, you may qualify. This credit can cover up to 35% of eligible expenses, depending on your income, with a maximum of $3,000 for one dependent or $6,000 for two or more.
Many retirees miss this because they’re unaware that the IRS considers caregiving for dependent adults a qualifying situation. If you’ve been juggling part-time work with caregiving responsibilities, this credit can help offset the cost.
6. The Foreign Tax Credit
If your retirement investments include international stocks or mutual funds, you may be paying foreign taxes without realizing it. Many financial institutions report these taxes on Form 1099-DIV, but investors don’t always claim the corresponding Foreign Tax Credit.
This credit allows you to deduct or directly reduce your tax bill for certain foreign taxes paid on investment income. While it’s often a small amount, over the course of a decade, it can add up, especially if you have significant holdings in foreign markets.
Some retirees miss it because they confuse it with a deduction and assume it’s not worth the paperwork. But since it’s a dollar-for-dollar credit, it can be more valuable than a deduction of the same amount.
7. The Health Coverage Tax Credit (HCTC)
The HCTC is a niche credit, but for those who qualify, it can cover a large portion of health insurance premiums—72.5% to be exact. It’s available to certain retirees receiving Trade Adjustment Assistance or Pension Benefit Guaranty Corporation benefits.
Because eligibility is tied to very specific circumstances, most seniors don’t even know it exists. But for those who lost pensions due to employer bankruptcy or were laid off due to foreign competition, this credit can be a lifeline.
If you think you might qualify, it’s worth checking the IRS guidelines or consulting a tax professional. Missing this credit could mean losing thousands of dollars a year in premium support.
Why Seniors Miss These Tax Credits
The primary reason so many retirees overlook these credits is that they’re buried deep within the tax code and not highlighted during tax season unless you know to look for them. Many tax software programs only prompt you about these credits if you enter very specific information, and some preparers may not bring them up unless you ask directly.
Another factor is the assumption that most tax breaks disappear after you stop working. In reality, many credits are designed to assist people with fixed or limited incomes, precisely the situation many retirees face.
Maximizing Your Retirement Tax Savings Before It’s Too Late
If you’re in retirement, every dollar counts, and that includes money you can save on taxes. These seven lesser-known tax credits aren’t just obscure footnotes in the IRS handbook; they can be powerful tools to stretch your retirement income further. From home improvements to continuing education to caregiving support, these opportunities can add up to thousands in savings over time.
The key is to be proactive. Review your expenses and income sources with these credits in mind, and don’t hesitate to ask your tax preparer about them directly. You may find that a small change, like making a last-minute IRA contribution or scheduling a home upgrade, can make you eligible for a significant credit.
Have you ever discovered a tax credit you didn’t know existed and been surprised by how much it saved you?
Read More:
10 State Tax Breaks for Seniors That Are Quietly Ending
8 Innocent Tax Errors That Trigger Audits in Retirement
Riley Jones is an Arizona native with over nine years of writing experience. From personal finance to travel to digital marketing to pop culture, she’s written about everything under the sun. When she’s not writing, she’s spending her time outside, reading, or cuddling with her two corgis.
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