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GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
 
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62% - Often

Tax Credit


Synonyms:Revenue Canada, offset, tax advantage, tax aid, tax benefit
Acronyms &
abbreviations:
TC
Filed Under: financial-banking, taxation
Tags: tax credit, taxes
 

Definition of tax credit (TC)

tax credit (TC)
1. Tax credits are much like credits you get from a store. You use the credit to reduce the amount of the tax you owe. Tax credits are more valuable than deductions because they directly reduce the amount of tax you owe, rather than reducing the amount of income that is taxed.

Related Terms and Acronyms:

  • circuit breaker   A tax credit that reduces property taxes for the elderly and permanently disabled. The credit is dependent on the amount of income earned which means the more you make, the lower the credit.
  • filing extension   An additional amount of time to file your return. A filing extension, however, does not give you more time to pay your taxes.
  • foreign tax credit (FTC)   This tax credit is for foreign income or profits taxes you paid on income you received from outside Canada and reported on your Canadian tax return.
      ➥  Form T2209 - Federal Foreign Tax Credits.
  • Home Renovation Tax Credit (HRTC)
  • income tax   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.
  • investment tax credit (ITC)
  • non-refundable credit   Tax credits reduce your tax liability dollar-for-dollar. Non-refundable credits can get your tax bill down to zero.
  • short tax year   A tax period less than 12 months long, resulting from a business start-up or the transition to a tax year ending on a different date.
  • tax deduction   An expense that governments allow you to subtract from your income before computing your income tax.
  • tax liability   The total amount of tax you owe.

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