Tax Credit

The article may contain affiliate links from one or more partners. Learn how we make money to continue our financial wellness mission.

The tax credit is an amount that a taxpayer who meets certain criteria can subtract from the tax owed. It reduces the taxes owed.

Examples include a credit for earned income below a certain limit and for qualified postsecondary school expenses.

Tax – Tax Credit = Taxes Owed; $1000 – $250 = $750