@botondkopacz wrote:
With the $7500 credit, it would mean that IRS will threat this in a way that $20000 - $7500 = $12500 the amount of tax that I should pay and refound the $7500?
Yes.
Based upon your fact pattern, you had a tax liability before the credit of $20,000.
The $7,500 tax credit would reduce that tax liability dollar for dollar, resulting in a tax liability of $12,500.
The primary problem here is that many taxpayers conflate tax liability with tax withheld (or estimated payments made) whereas they are not, in almost all instances, the same.
