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Over 60? Don't Miss These 7 IRS Credits That Can Cut Your Tax Bill

Seniors can increase their savings by taking advantage of the tax deductions and credits the federal government offers.

By Jordan Major , Edited by Becca Borawski Jenkins

Updated Sept. 10, 2026

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One perk of getting older is unexpected tax breaks. Tax deductions and credits aimed specifically at seniors can reduce how much you owe to the government, helping you stretch savings in retirement.

If you are over 60, you can avoid wasting money in retirement by taking advantage of these tax breaks.

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New OBBB senior deduction

As the name implies, this is technically a tax deduction, not a credit. Seniors who are 65 or older can enjoy a new deduction of an extra $6,000 when they file a federal return. You can take this deduction whether you use the standard deduction or itemize on your tax return.

The new perk became law as part of the One Big Beautiful Bill Act, which Congress passed in 2025. This tax break will be in place for all tax years between 2025 and 2028, and is available to each senior who is 65 or older.

Couples this age will receive an extra annual deduction of $12,000 over the next few years. However, the deduction begins to phase out if you are single and have a modified adjusted gross income over $75,000, or are married filing jointly with an income above $150,000.

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Extra standard deduction

This is another tax deduction rather than a tax credit. In addition to the expanded deduction that recently became law, those who are 65 or older can continue to take the existing extra standard deduction.

For the 2026 tax year, single taxpayers who are at least 65 can take an extra standard deduction of $2,050. For married couples filing jointly, the extra standard deduction is $1,650 per qualifying spouse.

The expanded standard deduction for seniors can be combined with the new senior deduction that is available for the 2025 to 2028 tax years.

Credit for the elderly or disabled

You may qualify for the Credit for the Elderly or the Disabled, worth up to $1,125, if your income and nontaxable Social Security, pension, annuity, or disability income fall below certain limits.

To qualify, you must be at least 65, or, if you're under 65, retired on permanent and total disability, receiving taxable disability income, and not have reached your employer's mandatory retirement age before the tax year.

You can learn more in the IRS Instructions for Schedule R (Form 1040), Credit for the Elderly or the Disabled.

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Medical expense deductions

Although not technically a credit, the IRS allows you to deduct from income qualifying medical expenses that exceed 7.5% of your adjusted gross income. You must itemize your deductions on your tax return to qualify for this tax break.

Technically, this deduction is available to all taxpayers, regardless of age. However, seniors may be in an especially good position to take advantage of it, since their incomes may be lower and their health expenses higher compared to younger folks.

Qualified charitable distribution

If you are at least 70 1/2, you can lower your tax bill by making a qualified charitable distribution. This lets you transfer up to $111,000 directly to the charity of your choice without including it in your taxable income.

This strategy is known as an income exlusion or a tax strategy rather than a credit. It is most effective for those who have reached the age of 73 and whose retirement accounts are now subject to required minimum distributions. Because the money is not included in your income, these distributions can help lower your tax bill.

IRA and 401(k) contributions after retirement

If you are over 60 but still working, you can lower your tax bill by making contributions to a traditional IRA or 401(k) plan.

For 2026, 401(k) contribution limits are $24,500. In addition, those who are age 50 and older can make a catch-up contribution of $8,000. Those who are between the ages of 60 and 63 can make an even larger catch-up contribution of $11,250.

IRA contribution limits are $7,500, plus a catch-up contribution of $1,100 for those who are 50 and older. Although not technically tax credits, these are valuable tax deductions and deferrals.

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Health savings account contributions

If you have not yet reached the age of 65 and enrolled in Medicare, you can still contribute to a health savings account (HSA). For 2026, HSA contribution limits are $4,400 for self-only coverage and $8,750 for family coverage. In addition, those who are at least 55 can make a catch-up contribution of $1,000.

HSAs do not provide tax credits, but they are are triple tax-advantaged. You pay no taxes on contributions, the money grows tax-deferred, and withdrawals are tax-free as long as they are used to pay qualified medical expenses.

Bottom line

The IRS offers several federal tax breaks for people 60 or older. Your state also may offer more. For example, Iowa taxpayers who are at least 55 can exclude all retirement income from Iowa state taxes. In Pennsylvania, seniors age 65 or older may qualify for up to $1,000 in property tax rebates.

Talk to your tax professional to find out if your state offers extra tax breaks for those over 60. Use the money you save from these tax breaks to build your savings even more, crush your debt, or take a nice vacation.

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