A tax credit is an amount taxpayers claim on their tax return generally to reduce their income tax. Eligible taxpayers can use them to potentially reduce their tax liability and increase their refund.

Refundable Tax Credits: If a taxpayer's tax liability is less than the amount of a refundable credit, they can get the difference back in their refund. Some taxpayers who aren't required to file may still want to do so to claim refundable tax credits.

Nonrefundable Tax Credits: If a tax credit is nonrefundable, once a taxpayer's liability is zero, the taxpayer won't get any leftover amount back as a refund.

• Elementary School: Next time you're at a town or state park, you can mention that the taxes people pay help maintain it, making it enjoyable for everyone. Similarly, walking on sidewalks or going to public school are examples of how taxes are used, things that kids can easily understand.
• Middle School: You may choose to deduct a portion of your child’s allowance as "taxes." Allocate a percentage of each dollar they receive to a family Tax Jar. Collectively decide on a family need to allocate the money towards, fostering a sense of achievement and instilling the importance of saving.
• High School: Introduce real-life tax documents such as pay stubs. Guide your child through understanding tax brackets, FICA, deductions, and their functions. This equips them for their initial job experiences and enables them to comprehend and complete tax forms effectively.