Alicia has a tax credit of $100 and a marginal tax rate of 28%.Alicia's income tax will be reduced by how much as a result of the credit?

Question

Quizplus · Accepted Answer

A tax credit directly reduces the amount of tax owed. In this case, Alicia has a tax credit of $100, so her income tax will be reduced by the same amount, regardless of her marginal tax rate. Therefore, the correct answer is C.

Alicia Has a Tax Credit of $100 and a Marginal