Module 4: Introduction and outline

In this module, How tax credits can help you, we will discuss some of the typical credits New Yorkers may qualify for.

How tax credits and deductions work

Whether you are an individual taxpayer or you represent a business, tax credits, deductions, and certain investments can change how much tax you owe.

A tax credit can be a dollar-for-dollar reduction in your actual tax bill. Some tax credits are subtracted from the tax you owe. A few credits are even refundable, which means that if you owe $250 in taxes but qualify for a $1,000 credit, you’ll get a check for $750. (However, most tax credits aren’t refundable.)

A tax deduction is a dollar amount you subtract from your adjusted gross income (AGI), making your taxable income lower. Tax deductions and investment losses are subtracted from your income before you calculate your tax. The lower your taxable income, the lower your tax bill.

Here are some common tax credits you may be eligible for:

• Credits for New York State residents
  
  • New York State household credit
  • Real property tax credit
  • New York State resident credit
• Earned income credits
  
  • Earned income tax credit
  • Noncustodial parent earned income tax credit
• Credits related to children
  
  • Empire State Child Tax Credit
  • Child and dependent care credit
• Credits related to elder care
  
  • Long-term care insurance credit
  • Nursing home assessment credit
• Credits related to home or farm ownership
  
  • Clean heating fuel credit
  • Farmers' school tax credit
• Other common credits 
  • College tuition credit
  • Volunteer firefighters' and ambulance workers' credit

While we covered what seems like a lot of different credits, there are many more that you might qualify for depending on your circumstances. For a full listing, see Income tax credits.

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