Quote:
Originally posted by Arvon:
Most if not all of the people in that income bracket don't pay taxes anyway, how can there be a tax credit?
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The $10.5K to $26K folks *do* pay taxes. Even if they're only paying 20%, that's still over $4K a year. Nothing to sneeze at and call "nothing." The folks below $10.5K don't pay taxes, and they don't qualify for the credit either.
BTW, a "credit" is not a "deduction." Deductions can only get your tax burden down to zero, and each dollar of deduction only garners you a tax savings of the % tax burden you carry, be it 10%, 20%, or 35%. A credit, on the other hand, can get you into the "gaining money" realm, and it is either a specified amount (as child care credit) or a 1:1 tax savings per dollar spent (as with the lifetime learning credit).