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

The law cut taxes on tips and overtime, modestly increased the child tax credit, created new tax deductions for some seniors and for interest on auto loans, and significantly hiked the maximum SALT deduction for state and local taxes. —Howard Gleckman, Forbes.com, 28 Jan. 2026

The Buying American Cotton Act will incentivize the consumption of products made with cotton grown in the United States with a tax credit. —Jennifer Bringle, Sourcing Journal, 27 Jan. 2026

The greater San Francisco Bay Area also is generally more expensive to build market-rate and low-income housing tax credit program projects, according to a RAND study last year. —Devan Patel, Mercury News, 26 Jan. 2026

Deadline understands that work on the Italian tax credit is ongoing at government level and that reforms are still being finalized with potential for adjustments. —Andreas Wiseman, Deadline, 26 Jan. 2026

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