A tax credit is a credit that the Internal Revenue Service gives to a taxpayer with regard to their income tax return. When the tax credit is applied, the taxpayer's taxable income is reduced. The reduced taxable income means that they are assessed a smaller amount of owed taxes. A tax credit can come in any number of forms. There are education credits, adoption credits, earned income tax credits, lifetime learning credits, child and dependent care credits, hope credits, and energy credits. There are many more types of tax credits available to taxpayers. A tax credit can also be a credit given to a taxpayer for a partial payment they have already made toward any taxes they owe.