tax credit

noun

: an amount of money that is subtracted from taxes owed

Families with children in college will receive a tax credit this year.

Examples of tax credit in a Sentence

Recent Examples on the Web

In his 1999 State of the Union, Clinton proposed creation of personal retirement accounts that individuals could seed with funds with a tax credit and then qualify for additional matching funds. —Star Parker, Boston Herald, 30 Nov. 2025

The foreign tax credit is designed to prevent double taxation. —Liz Weston, San Diego Union-Tribune, 30 Nov. 2025

The $450 million went to paying for new tax cuts and a new education tax credit that reimburses families for education expenses outside of the public school system, including tuition at private, religious schools. —Clark Corbin, Idaho Statesman, 27 Nov. 2025

What To Know From January 1, 2027, taxpayers will be able to claim a nonrefundable federal tax credit for donating to certain scholarship granting organizations, or SGOs. —Aliss Higham, MSNBC Newsweek, 26 Nov. 2025

Rhymes for tax credit

• accredit
• discredit
• noncredit
• dedit
• edit
• microcredit

Legal Definition

tax credit

noun

: an amount that may be subtracted from the sum of tax otherwise due and that is distinguished from a deduction applied to gross income in the calculation of taxable income compare exemption