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

For example, there are income limits for the child tax credit, the student loan interest deduction, education tax breaks, among others. —Kate Dore, Cfp®, Ea, CNBC, 21 Nov. 2025

The auto industry is seeing less demand for electric vehicles after a $7,500 federal tax credit was eliminated in September. —James Powel, USA Today, 21 Nov. 2025

Senate Republicans are set to vote on the tax credit as part of a deal reached with centrist Democratic senators to reopen the government. —Andrew Stanton, MSNBC Newsweek, 17 Nov. 2025

Democrats wanted to extend an enhanced tax credit expiring at the end of the year that lowers the cost of health coverage obtained through Affordable Care Act marketplaces. —Kevin Freking, Fortune, 13 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