What are Tax credits?

Tax credits are similar to tax deductions but there's a slight difference the credits are a dollar for dollar reduction of your tax bill. Here are a few examples: if you hire a babysitter to take care of your kids, or hire a nurse to take care of the elderly or any disabled family member. Or you can earn credit for buying a hybrid car, adopting a child though this list changes from time to time but some of the options do stay the same. There's a difference also between the families which have above or over the ceiling incomes. Some credits might not apply for one of them when the other can freely use it.