In the United States, the term “tax break” is often used pejoratively, as if to imply the inherent unfairness of any regulation that does not tax everyone in exactly the same manner. However, there are valid policy reasons that cause different people to be taxed accordingly. Still, due to the stigma associated with passing ‘tax breaks,’ legislatures do not often publicize them unless they will apply to a wide swath of people. Because of this, it is very likely that you are eligible for tax breaks you may not be aware of.
Credits, Deductions and Exemptions
Under the law, there are many categories of ‘tax break,’ and they all differ in terms of the procedure used to claim them.
A tax credit allows you to subtract a certain amount from the amount of tax you owe the government. New York has several tax credit options, most of which mirror those found on the federal return. The major credit that differs is called the Empire State child tax credit. Many states have tax credits for qualifying children, but the amount of the New York credit is specifically contingent on whether someone has claimed the federal child tax credit as well – if not, the amount of the credit will be significantly less.