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Tax Credits are straight deductions taken from the calculated tax. You get a dollar to dollar reduction in taxes in case of tax credit compared to tax deduction which only lower your taxable income. Generally tax credit are direct and more be benefit than tax deductions. If both are available like in the case of education tax credits, calculate using tax credit and tax deduction and take the one which gives you maximum tax refund.
There are many federal and state tax credits for individuals and business. Few of the common tax credits for individuals are Child Tax Credits, Education Credits, Adoption Credit, Earned Income Credit , Credit for the Elderly or the Disabled, etc. See the list below for more
There are eligibility rules to qualify each of the tax credit for individuals and you need to figure out your eligibility before claiming any one of them. You can use the worksheets available IRS publication 17 for help. If you are using a tax software and answer the interview questions correctly, it will figure out the applicable tax credits for you.
There are hundreds of business tax credits from federal, state, and local governments. Most of these tax credits are specific industry. We always advice to consultant an tax professional to find whether your industry qualify for any of the tax credits in your state and local governments.
Tax Credits For Individuals
- Child Tax Credits
- Credit for the Elderly or the Disabled
- Education Credits - Hope & Life Time Learning
- Adoption Credit
- Low income housing tax credit
- Earned Income Credit (EIC)
- Advance Earned Income Credit
- Retirement Savings Contributions Credit
- Foreign tax credit
- Federal energy tax credit
- Tax credit for Hybrid Vehicles
- Real Estate Rehabilitation Tax Credit
- Homestead tax credit
- Home improvement tax credit
- Form 8296 - Mortgage Interest Tax Credit
- Form 8827 - Credit for Prior Year Alternative Minimum Tax
- Qualified Electric Vehicle Credit
- General Business Credit
- Empowerment Zone & Renewal Community Employment Credit
- New York Liberty Zone Business Employee Credit
- Non conventional Source Fuel Credit,
- Qualified Zone Academy Bond Credit,
- employer Social Security credit
- work opportunity credit
- welfare-to-work credit
- disabled access credit
- rehabilitation credit
- research credit
- empowerment zone employment credit
- community development credit
Business Tax Credits
- Form 3800, General Business Credit (PDF).
- Form 3468, Investment Credit (PDF). This consists of the sum of the rehabilitation, energy, and reforestation credits.
- Form 5884, Work Opportunity Credit (PDF).
- Form 5884-A, Credits for Employers Affected by Hurricane Katrina (PDF)
- Form 6478, Credit for Alcohol Used as Fuel (PDF).
- Form 6765, Credit for Increasing Research Activities (PDF).
- Form 8586, Low-Income Housing Credit (PDF).
- Form 8611, Recapture of Low-Income Housing Credit (PDF).
- Form 8820, Orphan Drug Credit (PDF).
- Form 8826, Disabled Access Credit (PDF).
- Form 8830, Enhanced Oil Recovery Credit (PDF).
- Form 8834, Qualified Electric Vehicle Credit (PDF).
- Form 8835, Renewable Electricity Production Credit (PDF).
- Form 8844, Empowerment Zone Employment Credit (PDF).
- Form 8845, Indian Employment Credit (PDF).
- Form 8846, Credit for Employer Social Security and Medicare Taxes Paid on Certain Employee Tips (PDF).
- Form 8847, Credit for Contributions to Selected Community Development Corporations (PDF).
- Form 8861, Welfare-to-Work Credit (PDF).
- Form 8864, Bio diesel and Renewable Diesel Fuels Credit (PDF)
- Form 8874, New Markets Credit (PDF)
- Form 8881, Credit for Small Employer Pension Plan Startup Costs (PDF)
- Form 8882, Credit for Employer-Provided Childcare Facilities and Services (PDF)
- Form 8896, Low Sulfur Diesel Fuel Production Credit (PDF)
- Form 8900, Qualified Railroad Track Maintenance Credit (PDF)
- Form 8906, Distilled Spirits Credit (PDF)
- Form 8907, Non conventional Source Fuel Credit (PDF)
- Form 8908, Energy Efficient Home Credit (PDF)
- Form 8910, Alternative Motor Vehicle Credit (PDF)
- Form 8911, Alternative Fuel Vehicle Refueling Property Credit (PDF)
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