what s the difference between tax credit and tax deduction 
both tax credits and tax deductions can help taxpayers pay less in taxes but there are distinct differences between the two a tax credit is a straight subtraction from your tax bill for example a 10 tax credit will reduce your tax bill by 10 a tax deduction lowers your taxable income and therefore lowers the total amount you owe a tax deduction reduces your taxable income while a tax credit reduces your tax bill dollar for dollar 12