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Tax Credit

A direct reduction in the amount of tax owed, as opposed to a deduction which reduces taxable income. A credit is generally more valuable than a deduction of the same amount.

Mechanical Insulation Property

Insulation materials, facings, and accessories installed on specific mechanical systems (like pipes, ducts, equipment) that meet energy efficiency standards and reduce energy loss.

Internal Revenue Code of 1986

The official body of tax law for the United States.

Taxable Year

The accounting period for which taxes are computed. For most individual taxpayers, this is the calendar year (January 1 to December 31).

Depreciation

An annual income tax deduction that allows a taxpayer to recover the cost or other basis of certain property over the time they use it. It's an allowance for the wear and tear, deterioration, or obsolescence of the property.

General Business Credit

A collection of various tax credits available to businesses. If a business qualifies for multiple credits, they are often combined into one general business credit to offset tax liability.