- Tax credits that reduce a person's tax liability dollar-for-dollar. Non-refundable credits can bring a tax bill down to nothing.
wastable tax credit, non-refundable tax credit
Related Terms and Acronyms
- Income Tax — Definition,
- The main source of revenue for the federal government and many Provinces. The tax is based on your earned and unearned income. The amount or percentage taxed is based on the amount of income, using the governments graduated tax scale.
- Income-splitting — Definition,
- A financial strategy used for tax purposes to reduce the overall tax burden on a family. Income is shifted from one family member to another who is in a lower tax bracket, so the income is taxed at the lower rate to save the family money.
- Refund — Definition,
- To give back, return, or repay.
- Tax Credit (TC) — Acronym, Important,
- Tax credits are used to reduce the amount of the tax owed. Tax credits are more valuable than deductions because they directly reduce the amount of tax owed, rather than reducing the amount of income that is taxed.
- Tax Deduction — Definition,
- An expense that governments allow you to subtract from your income before computing your income tax.
- Tax Liability — Definition,
- The total amount of tax you owe.
- Tax Refund — Definition,
- To receive money back from the government.