Tuesday, February 24, 2009

Deduction VS credit

Tax credit could ease burden of paying child care
"This credit is especially important to low-income families because it's refundable," said Shannon Ball, Oregon Department of Revenue's WFC coordinator.

A refundable credit means that if the credit is more than the tax you owe, the state will pay you the difference."

A family that qualifies for the credit could get some money back from the state even if they don't owe taxes," Ball said.

I get so tired of trying to convince people that it is possible to have a negative tax liability, that some people not only don't pay any taxes but instead get money sent to them when they file their taxes.

However you don't get money "back" because you didn't pay it in the first place and you don't get it "from the state" you get it from your neighbors.

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