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Tax Credit is defined as the dollar-for-dollar reduction in the tax. Can be deducted directly from taxes owed.
Tax Credit Explained
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
