User:Jaydavidmartin/Tax credits in the United States

In the United States, tax credits allow taxpayers to subtract money from the amount of tax they owe.

Background

The amount of tax owed by an individual is determined by a tax formula that begins with the taxpayer's gross income, subtracts certain deductions from gross income to yield the taxpayer's adjusted gross income, then subtracts the greater of the standard deduction or itemized deductions as well as qualified business income deductions to yield the taxpayer's taxable income, then applies the appropriate tax rate to the taxpayer's taxable income to yield their gross income tax liability, and then finally subtracts tax credits from gross income tax liability to yield the amount of tax due:

List of important credits

Earned Income Tax Credit

Main article: Earned income tax credit

Child care

Child tax credit

Main article: Child tax credit (United States)