A tax deduction is an expense that reduces taxable income and
saves a certain percentage of tax. A tax deduction helps determine how much
taxes you owe to the state.
A tax credit, on the other hand, reduces your tax liability
dollar-for-dollar. A tax credit reduces the amount you owe to the state. In
other words, if you are married and filing jointly and owe $800 in state taxes,
you can take the credit and owe nothing. By donating to a Qualifying Charitable
Organization, or Qualifying Foster Care Organization, you may reduce the amount
you owe to the state or you may increase your refund, dollar for dollar. This
can allow you to donate to programs helping the working poor at no cost to you!