Tax credits are meant to increase your net income. Unlike a tax deduction which Silagra is an expenditure that you deduct from your gross income and thereby reduces your taxable income, a tax credit has the effect of reducing your liability by deducting the tax credit from the liability.

It comes in two main ways. The first way is when you have already made a partial payment in regards to your taxes. So that, if your total annual income requires you to pay 1,000 pounds and you had already paid 600 pounds in the course of the year, the 600 pounds becomes the credit when calculating your liability.

On the other hand, it can also be a direct reduction of your liability regardless of your ability to pay. This is also known as tax relief. For example, the government can choose to deduct 50 pounds from every individual’s tax liability. This effectively reduces the liability of every tax-paying individual by a maximum of 50 pounds.

Who qualifies for it?

Majority of the families who set out to claim are those that have children. In fact, 90 percent of all the families that have children do qualify for the same. However, these benefits are not just a reserve for those that have children. There are other factors that can make you qualify for them even if you do not have a single child in your house.

For you to qualify for tax credit as a person over the age of 25 years, you need to work for at least 30 hours in a week. You can also get it if you suffer from a disability. However, this requires that you be at least 16 years old and working for at least 16 hours a week each day. The 16 hour week threshold is also applicable to those who are seeking credits and are at least 50 years old.

However, it is important to note that the law does allow you to make a claim if at all you have been working for a certain amount of time before you temporary left employment. A good example is the maternity or paternity leave. If you were working for 30 hours a day and then left for maternity leave for three months, you will still be able to claim your credit for the income that you will receive during those three months, based on the 30 hours that you were working before you set out for maternity leave.

When dealing with issues relating to claiming the tax credit, it is always important that you keep yourself abreast with the developments in the laws. It is not enough for you to know whether or not you qualify. You need to know how much it is, who is entitled to take the credit (if you are married,) and what are the procedures for applying for the same.

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Category: Finance/Taxes
Keywords: tax terms