06/22/2026
Tax credit: Tax credits reduce the amount taxpayers owe, dollar-for-dollar. Eligible taxpayers can reduce their tax bill and, in some cases, even increase their refund.
Exemption: Exemptions are amounts that can be reduced from taxable income that taxpayers can claim for themselves, their spouses, and dependents. Whether personal or dependency, exemption amounts are set by tax authorities and typically change each year.
Deduction: Deductions can be subtracted from gross income and ultimately reduce what you owe.