Tax Credit

Question

Sam and Melissa are in the 10% tax bracket and itemize their deductions. How much will their tax bill be reduced if they qualify for a $1100 tax credit?

Answer 1

Their tax bill will be reduced by the $1,100 tax credit.  Tax credits are subtracted after taking into account any tax rates/deductions, etc.  So the 10% tax bracket will remain the same, but their tax bill will be reduced by that $1,100 tax credit.