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What's the difference between a tax credit and a tax deduction?
A tax credit applies directly against the taxpayers' liability. A tax deduction applies against a taxpayers' income, lowering the adjusted gross income and possibly moving a taxpayer to a lower tax bracket. Tax credits have a greater benefit to a taxpayer than a tax deduction. There are two categories of tax credits: Refundable and non-refundable. Residential Energy Tax Credits for 2009 and 2010 are considered to be non-refundable tax creditsunder the IRS regulations, just as the previous tax credits were for 2006 and 2007. |
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What are the qualifying criteria to get the 2009 and 2010 Federal Tax Credits for energy efficient residentail HVAC equipment? |
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The revised criteria for qualifying residential HVAC equipment under Section 1121 of the ARRA legislation are as follows:
1. A natural gas, propane, or oil furnace rated at 95.0% AFUE or higher.
2. Any... [ read more ]
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What's the difference between Non-Refundable and Refundable Tax Credits? |
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Most, but not all, tax credits are referred to as non-refundable credits. A non-refundable credit is a tax that can reduce your tax liability to zero, but not below. You must have tax liability on line... [ read more ]
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