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Tax Credit

A direct reduction in the amount of tax owed. A credit reduces your tax bill dollar for dollar, unlike a deduction, which only reduces the amount of income subject to tax.

Refundable Credit

A type of tax credit that can result in a refund check to the taxpayer, even if the credit amount is more than the taxes they owe. If a credit is not refundable, it can only reduce your tax liability down to zero.

Internal Revenue Code of 1986

The main body of tax laws for the United States, which is managed by the Internal Revenue Service (IRS).

Taxable Year

The annual accounting period for keeping records to figure income and expenses. For most individual taxpayers, the taxable year is the calendar year (January 1 to December 31).

Subpart C of part IV of subchapter A of chapter 1

A specific section within the Internal Revenue Code where certain tax credits are listed.

Conforming Amendments

Minor changes made to existing laws or sections to ensure they align and are consistent with a new piece of legislation.