Tax Credit vs. Tax Deduction
A tax deduction lowers the income you're taxed on; a tax credit lowers your tax bill dollar-for-dollar. A $1,000 credit saves you $1,000, while a $1,000 deduction saves only your marginal rate times $1,000 — so credits are almost always more valuable.
Some credits are refundable, meaning they can pay you even if you owe no tax; others only reduce your bill to zero. Deductions matter most to higher earners, since their value scales with your marginal tax rate.