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What is the difference between a credit and a deduction?

 
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What is the difference between a credit and a deduction?

A deduction reduces your income so you get taxed on a lower amount.

 

A credit is subtracted off the tax.  Some credits can only reduce your tax to zero.  In which case you will get all your withholding back.

 

But some credits are refundable meaning you can get it even if you don't owe any tax.

What is the difference between a credit and a deduction?

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