It would be the 22,500 that the 7500 is used against....so you would get to use all of it. And, in your example, would get a refund of some of your withholding already paid in.
The tax liability that the credit is used against, is the tax amount before considering how much you've already paid in thru withholding or any estimated tax payments.
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Note: Using the 2020 tax software, I found that your tax liability would only be about 17,500 for a single person, no children and 110,000 wages......But if you do have additional income from other things, like investment capital gains, interest, dividends, Mutual Fund distributions or retirement account distributions, then yeah, your tax liability could get higher (And of course, absent any congressional tax changes later this year...those cant be predicted, but would be unlikely to remove much more than a couple thousand of that total lability number)
____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
