A tax credit is a tax incentive which allows certain taxpayers to subtract the amount of the credit from the total they owe the state. It may also be a credit granted in recognition of taxes already paid or, as in the United Kingdom, a form of state support for low earners.
Incentive tax credits may be used to encourage behaviors like investment or parenting. A credit reduces tax bills, unlike tax deductions and tax exemptions, which reduce tax bills by reducing the size of the base (for example, a taxpayer's income or property value) from which the tax bill is calculated.
Most tax credits are nonrefundable tax credits and so do not apply if no taxes are owed. However, some tax credits are refundable tax credits so if the credit exceeds the amount of taxes owed, the excess is returned to the taxpayer.
n. a direct reduction in tax liability (not dependent on the taxpayer's tax bracket)
Usage examples of "tax credit".
If the two of them had become a murder team, Peaty was certain to havebeen the dominant one.
And poor Americans would keep every dime they make because the earned income tax credit means they already pay no federal income tax.
And we would almost certainly have to scrap the broad-based middle-class tax cut, though I was still determined to cut taxes for working families earning about $30,000 a year or less by doubling the Earned Income Tax Credit.
We had made a dent in the problem by doubling the Earned Income Tax Credit.
On most issues, Bush was in line with the conservative congressional Republicans, though he had criticized their budget for being harsh to the poor because it raised taxes for low-income Americans by cutting back on the Earned Income Tax Credit, while reducing taxes on the wealthiest Americans.
I had sent legislation to Congress to create my national service program, to double the Earned Income Tax Credit and create empowerment zones in poor communities, and to dramatically cut the cost of college loans, saving billions of dollars for both students and taxpayers.
First, a 40% tax credit should be allowed on all high technology investment, including research and development, to direct our national strategy toward the creation of new industries, which could be expected to provide new sources of employment, taxes and foreign exchange.
Would he avail himself of the tax credit offered to newly registered corporations?
I did not know that the company got a tax credit for hiring us, dependent on the percentage of disabled workers by division and specialty.
At the Princeton University commencement, I outlined a plan to open the doors of college to all Americans and to make at least two years of college as universally available as high school: a tax credit modeled on Georgia’.
If the tuition tax credit was adopted, along with the college aid expansions I had already signed into law, we could rightly claim to have opened the doors of college to all Americans.
They also refused to pass the tax credit on the production and purchase of clean energy and energy conservation devices.
I can probably even authorize tax credit if you send trained fighters for the Guard instead of cash or kind at tax time, he continued.
Al Gore and I tried for years without success to get them to adopt a 25 percent tax credit for the production or purchase of clean energy and energy conservation technology, with mountains of evidence to support our position.
Finally, some of the things we were doing that would help millions of Americans were either too complex for easy consumption, like the Earned Income Tax Credit, or too controversial to avoid being politically damaging, even when they were good policy.