Trump’s Budget Could Tighten Refundable Tax Credit Requirements
Posted in News on May 31, 2017
Under the U.S. tax code, there are several refundable tax credits, including the Child Tax Credit and the Earned Income Tax Credit. A tax credit is not the same as a deduction. A deduction allows you to reduce your taxable income so, for example, a $1,000 deduction if you have a $20,000 income would mean you were taxed only on $19,000 in income instead of $20,000. A tax credit reduces your tax bill so if you owed $1000 in taxes and got a $500 tax credit, you'd only owe $500.
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