How does a tax credit differ from a deduction?
A tax credit is significantly more beneficial than a deduction. A credit reduces your Georgia taxes dollar-for-dollar while a deduction reduces the taxable income upon which taxes are calculated. If you claim the tax credit on your Georgia return, you cannot also claim a deduction for the same donation on your Georgia return. However, you may be able to claim the payment as an itemized deduction on your Federal income tax return, thus lowering the amount of Federal tax paid.
