Tax credits directly reduce the amount of tax you owe, making them more valuable than deductions. They come in two categories: nonrefundable and refundable.
A tax credit is an amount that reduces your tax liability dollar for dollar.
Qualification for tax credits varies by credit type and often depends on income and specific circumstances.
Some tax credits can be carried forward to future tax years if not fully utilized.
No, tax credits reduce your tax bill directly, while deductions reduce your taxable income.
You can claim tax credits on your tax return by filling out the appropriate forms.
