I just came across this FAQ regarding the new homebuyer tax credit …. as opposed to tax deduction*.
Check it out: http://www.federalhousingtaxcredit.com/2009/faq.php
*For Example: #17
Is a tax credit the same as a tax deduction?
No. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $8,000 in income taxes and who receives an $8,000 tax credit would owe nothing to the IRS.
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