Which Tax Credits

I remember the first time I filled out a tax return as a freelance graphic designer. My head was spinning, and I wasn’t sure where to start. I had heard the phrase 'tax credits' thrown around, but I had no idea what they meant, let alone which ones applied to me. It was a frustrating experience, and I realized how important it is for gig workers like me to understand which tax credits are available to us. This article is my attempt to guide you through that maze.

When I finally figured out how to claim my rightful tax credits, the relief was enormous. It wasn’t just about saving money — it was about reclaiming control over my finances. The process taught me that knowing which tax credits you qualify for can make a significant difference in how much you owe the government each year. It's a lesson I want to pass on.

I’ve spent the past few years digging into the IRS codes and talking to tax professionals to understand which tax credits are most beneficial to gig workers. Whether you’re a content creator, a rideshare driver, or a contract worker, there are specific tax credits that can help you reduce your tax burden. I’m here to break them down for you in a way that’s honest, practical, and easy to follow.

What Are Tax Credits and Why They Matter

As of August 2026, Unlike deductions, which lower your taxable income, tax credits reduce your tax liability dollar for dollar. For example, if you owe $2,000 in taxes and qualify for a $500 credit, you only pay $1,500. This makes tax credits particularly powerful for gig workers who often have unpredictable income.

Many gig workers are unaware of the credits they can claim, which means they’re missing out on significant savings. Some of the most common tax credits include the Earned Income Tax Credit, the Child and Dependent Care Credit, and the Health Coverage Tax Credit, each of which applies to different situations.

When I first started working as a freelance writer, I didn’t realize I was eligible for the Earned Income Tax Credit. After I claimed it, my tax bill dropped by over $1,000 — a game-changer for someone with irregular income.

Part of our More employee tax in uk guide.

The Earned Income Tax Credit (EITC) — A Gig Worker’s Lifeline

The Earned Income Tax Credit is designed to help low- and moderate-income workers, including gig workers. For the 2023 tax year, the maximum credit for those with no children is $1,648, and it increases based on the number of qualifying children in the household.

To qualify, you must have earned income from gig work or other sources, and your income must fall below certain thresholds. For someone like me who earned around $35,000 in 2023, the EITC reduced my tax bill significantly.

One of my freelance colleagues, who made about $28,000 in freelance income, was able to claim over $2,000 in EITC credits. This helped her cover unexpected medical bills and avoid going into debt.

The EITC is a financial lifeline for many gig workers.

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Health Coverage Tax Credit for Independent Contractors

The Health Coverage Tax Credit is available to independent contractors who pay for their own health insurance and meet certain income limits. For the 2023 tax year, the credit can cover up to 72.5% of your premiums.

I had to pay out-of-pocket for health insurance during my first year as a freelancer, and I didn’t know I could claim the HCTC. After I filed for it, my tax bill dropped by nearly $300 — a welcome relief.

This credit is especially useful for gig workers who don’t have access to employer-sponsored insurance but still want to maintain health coverage.

“I remember the first time I filled out a tax return as a freelance graphic designer.”— Tax Deductions for Gig Workers editors

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Child and Dependent Care Credit — If You Have Kids

The Child and Dependent Care Credit helps offset the cost of child care for working parents. It can be claimed for children under 13 years old or for dependents with disabilities.

For 2023, the maximum credit is $8,000 for one child and $16,000 for two or more children. If I had a child and paid for a babysitter, I could have claimed up to $8,000 — a significant amount.

This credit is particularly valuable for gig workers who may not have employer-sponsored child care benefits and must pay for care themselves.

Education Credits — If You’re Still Learning

The Lifetime Learning Credit and the American Opportunity Tax Credit are available to students and their families. While these are often associated with college students, they can also apply to gig workers who take continuing education courses.

I enrolled in a photography course to expand my portfolio, and I was able to claim the Lifetime Learning Credit for the tuition I paid. It was a small amount, but it helped me reinvest in my business.

These credits are especially useful for gig workers who want to upskill without incurring large costs.

The Child Tax Credit — A Game-Changer for Gig Workers With Kids

The Child Tax Credit is available to taxpayers who have qualifying children under the age of 17. For 2023, the credit is up to $2,000 per child, with $1,400 of that credit being refundable.

This means that even if you owe no taxes, you can still receive a refund from the IRS. For gig workers with irregular income, this can be a crucial source of financial support.

One of my friends, who works as a rideshare driver and has two children, received over $3,000 in Child Tax Credits last year — a significant boost to her budget.

The Child Tax Credit is a financial lifeline for families with gig workers.

The Saver’s Credit — A Hidden Gem for Gig Workers

The Saver’s Credit is a lesser-known but valuable tax credit that encourages individuals to save by contributing to retirement accounts. For 2023, the credit can be up to $2,000 for single filers and up to $4,000 for married couples filing jointly.

This is especially important for gig workers who don’t have access to employer-sponsored retirement plans. By contributing to a Roth IRA or a SEP IRA, I was able to claim the Saver’s Credit and save more for the future.

The Saver’s Credit is a great way to reduce your tax bill while also building long-term financial security.

The Work Opportunity Tax Credit — If You Hire Gig Workers

If you’re a small business owner or employer who hires gig workers, you may qualify for the Work Opportunity Tax Credit (WOTC). This credit allows employers to claim up to $9,000 per qualifying new hire who comes from a targeted group, such as veterans, individuals receiving Supplemental Security Income (SSI), or those who have been unemployed for at least 26 weeks. This credit can significantly reduce your tax liability and incentivize hiring from underrepresented groups.

To claim the WOTC, you must first complete Form 8857 with the IRS and obtain a certification from the state workforce agency. The process involves submitting an application and waiting for approval, which can take up to 45 days. Once approved, you can claim the credit on your quarterly tax returns. This is a powerful tool for small businesses that want to support gig workers while also reducing their tax burden.

For example, if you hire a gig worker who is a veteran and they meet the eligibility criteria, you could receive a $9,000 credit. This can be a game-changer for small businesses with limited budgets, helping them invest more in their workforce. It’s important to document all hiring processes and keep records of the employee’s qualifications to ensure compliance with the IRS. Employers should also consider consulting with a tax advisor to handle the WOTC application and claiming process effectively.

Which Tax Credits