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Credit may have one of the following meanings, depending the context of the term:

1. for taxes, a dollar-for-dollar reduction in a person's tax liability. See also specific credits, including child and dependent care credit; investment tax credit; low- income housing credit.

2. in accounting, an entry that increases liabilities, owners' equity, revenue, and gains, while decreasing assets and expenses.

Description and Definition of Credit

A tax credit directly reduces the tax you owe, as opposed to a deduction that reduces income subject to tax. A credit is a direct dollar-for-dollar reduction of your income tax. You can get tax credits for items such as child care expenses and the earned income credit for low-income taxpayers.

Credit Issue

You may find information about Credit in this Tax Platform of the American Encyclopedia of Law.


See Also

Further Reading

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