Claiming the Standard Deduction? Here Are 10 Tax Breaks For Middle-Class Families in 2025

What is “middle-class”? Although definitions might vary, the Pew Research Center might have an answer.

A recent Pew report found that a family of three could be considered in the “middle” of upper and lower incomes when annual household earnings are from $56,600 to $169,800*.

For these middle-income homes, there might be good news come tax time: The IRS has several key tax breaks available for federal income returns, regardless of whether you claim the standard deduction or itemize (which is even better news for the 90% of Americans who opt for the standard deduction).

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Here are 10 tax breaks available to eligible middle-income taxpayers who claim the standard deduction on their 2025 income tax return.

*Note: Pew Research is based on 2022 Census Bureau Data and varies significantly by city and state.

What tax deductions and credits can I claim with the standard deduction as a middle-class working family?

Kiplinger used the $56,600 to $169,800 “middle-income” range released by the Pew Research Center to find 10 tax breaks available to middle-class families in 2025.

However, it’s important to note that specific geographic location, number of children and other financial and personal circumstances factor into whether an individual or household might be considered “middle-class.”

Additionally, the list below doesn't include tax-incentivized benefits, such as those for health coverage, tax-free investments, such as municipal bonds, or tax-advantaged savings accounts, such as IRAs.

Only federal tax credits and deductions meeting these income criteria were considered.

Even then, keep in mind this listing is not exhaustive, and it’s important to check with your state Department of Revenue website regarding additional tax breaks for which you could be eligible. Consult with a qualified tax professional when necessary.

Child care and other dependents tax breaks

1. The Child Tax Credit (CTC) for middle-class families

Single-filer income limit before phaseout begins: $200,000*

Joint-filer income limit before phaseout begins: $400,000*

According to recent data, taxpayers with incomes from $100,000 to $200,000 receive the largest average federal Child Tax Credit (CTC) compared with lower and upper income groups.

If you want to learn more about the CTC as a middle-class taxpayer, here are some fast facts:

• For 2025, the credit is worth up to $2,200 per qualifying child under age 17 (age 16 and younger).
• The refundable portion of the credit (the amount you receive even if you owe no tax) is $1,700.
• For every $1,000 that your income is above the income limits, your CTC is reduced by $50.

Starting in 2025, a Social Security Number (SSN) is also required for parents or guardians claiming this tax break. Households with non-citizen parents are likely to be ineligible to receive the credit.

*Note: “Income” for the CTC is based on a taxpayer’s modified adjusted gross income (MAGI), though other types of excluded income (like foreign earned income) may be added back to calculate your CTC amount.

2. Child and Dependent Care Credit for middle-income families

Single-filer income limit before phaseout begins: $15,000*

Joint-filer income limit before phaseout begins: $15,000*

The Child and Dependent Care Tax Credit (CDCTC) is designed to reimburse families for qualifying child care expenses while the parents are working (or looking for work).

The total 2025 CDCTC amount is worth up to $3,000 for one child or $6,000 for two or more children.

Although the CDCTC has a low beginning phaseout limit of $15,000, it might be considered a “middle-class” tax break for two reasons.

• First, the CDCTC is nonrefundable (meaning low-income families who are owed a tax refund can't receive the full benefit).
• Secondly, higher earners receive a diminished benefit relative to their total income.

Additionally, the CDCTC has no upper phaseout limit, meaning many middle-class families with children might see some potential tax benefit.

• Families with an income of $15,000 or less qualify to have 35% of their qualifying child care expenses reimbursed.
• A 1% phaseout exists for each $2,000 your income exceeds the $15,000 amount.
• Families with $43,000 or more will receive the minimum credit rate of 20% on qualifying expenses. This translates to a CDCTC of $600 to $1,200, depending on the number of qualifying children.

The federal CDCTC is available to those with qualifying child care expenses for children under age 13 (age 12 and younger) (or dependents with disabilities). Qualifying expenses might include before- and after-school care, babysitters, day care, and preschool.

For more information on qualifying expenses, see Kiplinger’s report, The Child and Dependent Care Credit: How Much Is It?.

*Note: “Income” for the CDCTC is based on a taxpayer’s adjusted gross income (AGI).

3. Tax Credit for Other Dependents: The 'Family Tax Credit' for middle-class families

Single-filer income limit before phaseout begins: $200,000*

Joint-filer income limit before phaseout begins: $400,000*

The credit for other dependents might be beneficial for middle-income families with qualifying children age 17 and older (so they no longer qualify for the CTC). Other dependents might also be considered “qualified.”

The maximum $500 credit amount is available to taxpayers who have:

• Income below $200,000 (single filers) or $400,000 (married filing jointly).
• A qualifying dependent. This might include a child, parent, or other qualified individual. (See the IRS website for qualifying dependency rules.)

The credit phases out by $50 for every $1,000 (or fraction thereof) that your income goes beyond the income limits.

For more information, check out Kiplinger’s report How Caregivers for Adults Can Save on Taxes in 2025.

*Note: “Income” for the credit for other dependents is based on a taxpayer’s adjusted gross income (AGI).

4. Adoption Credit for middle-income families

Single-filer income limit before phaseout begins: $259,190*

Joint-filer income limit before phaseout begins: $259,190*

The National Council for Adoption (PDF) surveyed more than 4,200 adoptive parents across all 50 states and Washington, D.C. Of the responses, more than half had income above $75,000, which is within the Pew Research Center’s “middle income” range.

Families who finalize an adoption in 2025 can save up to $17,280 in qualified child expenses. This includes a new refundable portion of the credit worth up to $5,000, meaning that if you owe no federal tax, you might still get up to that amount refunded to you after you file.

Here are some other important facts about the federal adoption credit:

• Qualified adoption costs eligible for the credit include adoption fees, court costs or legal expenses, any travel costs, home study fees, and expenditures associated with re-adoption in your home state (if foreign adoption applies).
• Families adopting a U.S. child with special needs can claim the full tax credit without having any qualified adoption expenses.
• Parents with an income of more than $259,190 will receive a reduced credit, with a complete phaseout at $299,190 or more.

Any remaining nonrefundable adoption credit can be carried forward for up to five years to offset future tax liabilities.

*Note: “Income” for the federal adoption credit is based on a taxpayer’s modified adjusted gross income (MAGI).

Education Tax Breaks

5. The American Opportunity Tax Credit (AOTC) for middle-class families

Single-filer income limit before phaseout begins: $80,000*

Married-filing jointly income limit before phaseout begins: $160,000*

The American Opportunity Tax Credit (AOTC) is designed to help families afford college. This partially refundable tax break phases out completely for single filers with incomes above $90,000 and married couples filing jointly with incomes above $180,000.

You can claim the AOTC on:

• 100% of the first $2,000 spent on qualified education expenses (such as books, tuition and fees), plus
• 25% of the next $2,000 you spend on these qualifying expenses.

Thus, the AOTC combined total is worth up to $2,500.

Once more, if the credit amount exceeds your tax bill, you’ll get a refund for 40% of the remaining amount (up to $1,000 per qualifying student).

However, there are various eligibility requirements you must meet to qualify for the AOTC:

• You (or your dependent or spouse) must be enrolled in school at least half-time.
• The qualifying individual must attend an eligible educational institution, AND
• Pursue a degree or other educational credential.

Furthermore, you can only use the AOTC for the first four years of enrollment. For more information on eligibility requirements, check out Kiplinger's report, What Is The American Opportunity Tax Credit (AOTC)?

*Note: “Income” for the AOTC is based on a taxpayer’s modified adjusted gross income (MAGI).

6. The Lifetime Learning Credit (LLC) for middle-income families

Single-filer income limit before phaseout begins: $80,000*

Married, filing jointly, income limit before phaseout begins: $160,000*

The Lifetime Learning Credit (LLC) is similar to the AOTC, but with one major difference: The LLC can be used for non-degree courses.

This means that, while you might only use the AOTC four times per tax return, you can claim the LLC as long as you are meeting eligibility requirements:

• The qualifying individual must be enrolled for at least one academic period (semester, trimester, etc.) during the tax year at an eligible educational institution.
• You don’t need to be enrolled half-time, and the coursework can be used to improve job skills (instead of a degree program). You can also be a graduate student.
• Books, tuition, and fees might be qualified expenses if purchased from the educational institution as a condition of enrollment. Room and board, insurance, and transportation are not considered qualifying expenses for purposes of the LLC.

While the credit isn’t refundable, it is worth up to $2,000 per tax return (20% of $10,000 of qualified education expenses).

*Note: “Income” for the LLC is based on a taxpayer’s modified adjusted gross income (MAGI).

7. Student Loan Interest Deduction for middle-income families

Single-filer income limit before phaseout begins: Up to $85,000*

Married, filing jointly, income limit before phaseout begins: Up to $170,000*

Qualifying middle-class earners looking to further save on educational costs might be eligible to claim the student loan interest deduction. To qualify for this tax break, worth up to $2,500, taxpayers must:

• Have a private or federal student loan taken out to pay for higher education expenses (room and board, tuition and fees, books, supplies, and other necessary costs).
• Pay interest on the loan and be legally responsible for repaying the amount due.

The full $2,500 student loan interest deduction starts to phase out for incomes above $85,000 (single) and $170,000 (married filing jointly).

For tax year 2025, incomes exceeding $100,000 (single) and $200,000 (married filing jointly) are ineligible to claim this deduction.

*Note: “Income” for the student loan interest deduction is based on a taxpayer’s modified adjusted gross income (MAGI).

Income Tax Breaks

8. Tip Income Deduction for working middle-class families

Single-filer income limit before phaseout begins: $150,000*

Joint-filer income limit before phaseout begins: $300,000*

Due to the passage of the GOP reconciliation bill dubbed the “One Big Beautiful Bill” (OBBB), eligible taxpayers can now claim a new temporary tip income deduction for tax years 2025 through 2028. This could provide tax relief for up to 4 million tipped workers in the U.S..

The tip income tax deduction might be claimed regardless of whether you itemize or claim the standard deduction on your federal income tax return.

• The maximum deduction amount for tip income in 2025 is $25,000.
• “Qualified” tips include both voluntary cash and charged tips (such as credit card or PayPal).
• Payroll taxes still apply (that is, the deduction doesn’t reduce Social Security or Medicare taxes).

For every $1,000 your income exceeds the above limits, your tip income deduction is diminished by $100. The deduction completely phases out for single filers with income of $400,000 and joint filers with income exceeding $550,000.

As first reported by Axios, the U.S. Treasury Department has recently released a list of qualifying professions for this tax break. Qualified professions might include:

• Wait staff and bartenders.
• Food servers, chefs and cooks.
• Dancers, musicians, singers and digital content creators.
• Housekeeper cleaners and resort desk clerks.
• Home plumbers, electricians and landscapers.
• Private event planners, pet caretakers and tutors.
• Hairstylists, Tailors, makeup artists and pedicurists.

The total list has more than 65 jobs across eight categories.

*Note: “Income” for the tip income tax deduction is based on a taxpayer’s modified adjusted gross income (MAGI).

9. Overtime Tax Deduction for middle-income families

Single-filer income limit before phaseout begins: $150,000*

Joint-filer income limit before phaseout begins: $300,000*

Similar to the tip income deduction, qualifying non-exempt employees might be able to claim an overtime deduction on their 2025 federal income tax return.

This temporary deduction (only available until 2028) is worth up to $12,500 for single filers and $25,000 for joint filers who work more than 40 hours per week.

Here are a few more fast facts about the federal overtime pay tax deduction:

• You must be a non-exempt employee who earns overtime under the federal Fair Labor Standards Act (FLSA).
• The deduction only applies to the “extra” half of your time-and-a-half rate and not your entire overtime wages.
• The deduction is reduced by $100 for every $1,000 of income over the above income thresholds.
• You can claim the deduction regardless of whether you itemize or take the standard deduction.
• When single filers have income of $275,000 or more (and married filing jointly couples make $550,000 or more), the overtime deduction is completely phased out.

*Note: “Income” for the overtime pay tax deduction is based on a taxpayer’s modified adjusted gross income (MAGI).

Purchasing Tax Breaks

10. Car loan interest tax deduction for middle-income families

Single-filer income limit begins: $100,000*

Married, filing jointly, income limit begins: $200,000*

The OBBB also introduced a new temporary deduction for car loan interest. The car tax break is available for taxpayers, whether they itemize or claim the standard deduction:

• The car loan interest deduction is worth up to $10,000 per year on qualifying vehicles.
• Single filers with income exceeding $100,000 (married, filing jointly, with income above $200,000) will face a $200 phaseout of the deduction for every $1,000 of income above the income limit.
• When income levels reach $150,000 for single filers ($250,000 for married filing joint couples), the car loan interest deduction is eliminated.

A recent survey indicates that one-third of middle-income households plan to buy a car in 2025.** But while the car loan interest deduction might help some save on car buying costs, there are a couple of caveats to keep in mind:

• The personal-use car interest loan deduction only applies to new, American-made vehicles purchased from 2025 to 2028.
• Different tax rules apply to vehicles used for business.

For more information, check out Kiplinger’s report, New GOP Car Loan Tax Deduction: Which Vehicles and Buyers Qualify.

*Note: “Income” for the car loan interest deduction is based on a taxpayer’s modified adjusted gross income (MAGI).

**Santander US surveyed 2,200 U.S. households with income levels between $50,000 and $148,000.

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