Which of the following statements regarding tax credits is true?
A)Tax credits reduce taxable income dollar for dollar.
B)Tax credits provide a greater tax benefit the greater the taxpayer's marginal tax rate.
C)Tax credits reduce taxes due dollar for dollar.
D)None of these statements are true.

Question

Quizplus · Accepted Answer

Tax credits reduce the taxes due dollar for dollar, meaning that the credit reduces the actual amount of tax owed rather than just reducing taxable income or providing a greater benefit for higher earners.

Which of the Following Statements Regarding Tax Credits Is True