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 emerging package from the House Republicans does not include an extension of an enhanced tax credit for millions of Americans who get insurance coverage through the Affordable Care Act. —Kevin Freking, Arkansas Online, 14 Dec. 2025

An Ohio senator's claim that millionaires primarily benefited from the EV tax credit is largely inaccurate, as income and price caps limited its use for high-end vehicles. —Jamie L. Lareau, USA Today, 12 Dec. 2025

In 2021, the American Rescue Plan Act, a pandemic relief law, temporarily increased the amount of the premium tax credit and expanded eligibility to households with an annual income of more than 400% of the federal poverty limit. —Greg Iacurci, CNBC, 12 Dec. 2025

Those who did will face a particular shock as the tax credit expires — while also confronting rising prices and shrinking options. —Addie Costello, jsonline.com, 12 Dec. 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