# Tax Credit

*Taxes — Finicade finance glossary*

A tax credit reduces your tax bill dollar for dollar, which makes it worth far more than a deduction of the same size. A $2,000 credit saves $2,000 regardless of your bracket, while a $2,000 deduction saves a few hundred. Credits are the policy instrument of choice for targeted goals — children, education, energy efficiency, low-income work — precisely because their value doesn't scale with income.

**Also known as:** tax credits, credit against tax

**Related terms:** [Tax Deduction](https://finicade.com/glossary/tax-deduction), [Refundable Tax Credit](https://finicade.com/glossary/refundable-tax-credit), [Child Tax Credit](https://finicade.com/glossary/child-tax-credit), [Earned Income Tax Credit](https://finicade.com/glossary/earned-income-tax-credit), [Tax Refund](https://finicade.com/glossary/tax-refund)

Source: https://finicade.com/glossary/tax-credit