Know the Tax Credit Laws

There are tax credit laws and oftentimes, they are set up to expire at a certain point in time. For example, recent tax credits enacted by Congress may expire in one year or more. If Congress does not act on that expiration, the tax credit expires. However Congress may also vote to extend tax credits.

The current state of the economy has seen an increase in debate about tax credits. In fact, some tax credits were set to expire and Congress voted to extend them. There are also tax credits which remain in effect as allowable deductions. For example, individuals get a tax credit for the number of dependants they are able to claim on their taxes.

Tax credits may be based on income or other factors such as household size. In any case, tax credits are used to lessen an individuals or entity's tax burden.

NEXT: Making the House Tax Credit Work for You