tax credit
Offsets liability directly
A tax credit is a dollar-for-dollar reduction in the amount of tax owed, distinct from a deduction, which merely reduces taxable income.
Governments use tax credits to encourage specific behaviors or provide relief: the child tax credit, electric vehicle tax credit, earned income tax credit.
Some credits are refundable, meaning you receive the excess if the credit exceeds your tax liability.
Conclusion from premises
- refundableAble to be repaid
- nonrefundableCannot be reimbursed
- liabilityLegal or financial obligation
- offsetCompensate by opposing force
withholding · filing · 1040 · IRS · schedule · adjustment · taxpayer · audit
Returned portion of payment
- stimulusWhat prompts a reaction
- benefitAdvantage or gain
- breakInterrupt continuity
- exemptionRelease from requirement
concession · advantage · grant · write-off · relief · encouragement · motivation · inducement
Authority over a state
- subsidyFinancial assistance from government
- entitlementAssumed right to benefits
- allowanceFixed periodic payment
- abatementDecrease in force
reduction · waiver · bipartisan · legislation · IRA · earned income · premium · affordable care
deduction
Conclusion from premises
- refundableAble to be repaid
- nonrefundableCannot be reimbursed
- liabilityLegal or financial obligation
offset · withholding · filing · 1040 · IRS · schedule · adjustment · taxpayer · audit · compliance
rebate
Returned portion of payment
exemption · concession · advantage · grant · write-off · relief · encouragement · motivation · inducement · investment
government
Authority over a state
- subsidyFinancial assistance from government
- entitlementAssumed right to benefits
- allowanceFixed periodic payment
abatement · reduction · waiver · bipartisan · legislation · IRA · earned income · premium · affordable care · housing
- economic policymonetary policy, fiscal discipline, fiscal stimulus, fiscal restraint, tariff
- financial reliefdebt relief, bailout, loan forgiveness, debt forgiveness, stimulus
- tax breaksexemption, exemptions, deduction, standard deduction, education credits
- Canadian taxesT1, T4, GST, PST, CPP
- Dutch taxesBTW, VAT, mortgage deduction, deductions, green taxes
- benefitsadvantage, healthcare coverage, dental insurance, benefit, health screening
tax credittax liability
Money owed to government
tax penalty · tax assessment · additional tax · back taxes · tax bill
tax credittax deduction
Permitted income reduction
deduction · exemption · tax write-off · exclusion · itemized deduction
tax, credit, taxing, taxed, taxation, credited, accredit, crediting, creditor