Tax credit

Within the Australian, Canadian, United Kingdom, and United States tax systems, a tax credit is an item which is treated as a payment already made towards taxes owed. A similar concept exists under different names in the French tax system. It reduces tax liability unit-for-unit, in contrast to a tax deduction, tax allowance or tax relief which reduce taxable income.

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Tax credits may be characterized as either refundable or non-refundable, or equivalently non-wastable or wastable. Refundable or non-wastable tax credits can reduce the tax owed below zero, and result in a net payment to the taxpayer beyond their own payments into the tax system, appearing to be a moderate form of negative income tax. Examples of refundable tax credits include the earned income tax credit and the additional child tax credit in the US, and the working tax credits or child tax credits in the UK.

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A non-refundable or wastable tax credit cannot reduce the tax owed below zero, and hence cannot cause a taxpayer to receive a refund in excess of their payments into the tax system. Some examples of non-refundable tax credits are the Hope and Lifetime Learning educational tax credits in the US or the former children's tax credit in the UK.

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Tax credit related Images and Photos (experimental)

Credit Card Lightbulb	Boker Credit Card Knife	The Tax Collector	Two Tax Gatherers c.1540
At the Tax Collector's	The Tax Collector 1543	Wat Tyler Attacks the Poll-Tax Collector	Our Best Customer But He Needs Credit!
Suppliant Peasants in the Office of Two Tax Collectors	Provost of Merchants and Aldermen of Paris Scene of Tax Collection