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What exactly is a tax credit?

tax credit
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What exactly is a tax credit?

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A tax credit is not money up front nor is it a grant. The tax credit is awarded upon completion of the project and is a direct, dollar for dollar, reduction in the amount of money a taxpayer must pay in taxes for a given year. It’s much better than a deduction, which only reduces a taxpayer’s income and may or may not put him in a lower tax bracket.

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