History of Tax credit in Timeline

By Popular Timelines Editorial Team · Updated: April 15, 2026

A tax credit is a tax incentive enabling taxpayers to deduct the credit's value from their total tax liability. It can represent recognition for taxes already paid or a state-provided discount in specific situations. Essentially, it functions as a rebate, reducing the amount of tax owed. Tax credits aim to encourage specific behaviors or alleviate financial burdens for certain taxpayers.

1936: Tax credit available for non-historic buildings

A 10% tax credit is available for non-historic buildings first placed in service before 1936.

1978: TJTC created by the Revenue Act

In 1978, the Targeted Jobs Tax Credit (TJTC) was created by the Revenue Act.

1986: Tax Reform Act of 1986 institutes a two-tier Tax Credit incentive

In 1986, Congress instituted a two-tier Tax Credit incentive under the Tax Reform Act to encourage the preservation of historical buildings.

1986: Tax Reform Act creates affordable housing tax credit

In 1986, the Tax Reform Act created a program where the U.S. Treasury Department allocates tax credits to each state based on population to develop and maintain affordable housing units.

1992: Renewable energy Production Tax Credit (PTC) created

In 1992, the renewable energy Production Tax Credit (PTC) was created under the Energy Policy Act, with a value of 1.5 cents/kilowatt-hour.

1994: TJTC in place until 1994

The Targeted Jobs Tax Credit (TJTC) was in place from 1978 to 1994.

1996: WOTC established by the Small Business Job Protection Act

In 1996, the WOTC was established by the Small Business Job Protection Act.

2007: Government aims to reduce tax credits to 2007-08 levels

The government responded that the tax credit system had been used to subsidize low pay and that changes would bring total expenditure on tax credits back down to levels seen in 2007-08.

February 2009: American Opportunity Tax Credit (AOTC) signed into law

In February 2009, the American Opportunity Tax Credit (AOTC) was signed into law as part of the American Recovery and Reinvestment Act.

2009: QSCBs created by the American Recovery and Reinvestment Act

In 2009, QSCBs were created by Section 1521 of the American Recovery and Reinvestment Act to help schools borrow at nominal rates.

2010: AOTC replacing the Hope Scholarship credit

The AOTC replaced the Hope Scholarship credit for Tax Years 2009 and 2010 and increased benefits for nearly all Hope credit recipients.

2013: Income tax credit for electricity production

In 2013, Section 45 of the Internal Revenue Code allowed an income tax credit of 2.3 cents/kilowatt-hour for the production of electricity from various renewable energy plants.

December 2014: WOTC extended retroactively to the beginning of 2014

In December 2014, the WOTC was extended retroactively to the beginning of 2014 by the Tax Increase Prevention Act of 2014 (TIPA).

2014: Oregon RETC gave $4.2 million in tax credits

In 2014, Oregon's RETC gave approximately $4.2 million in tax credits.

December 31, 2014: WOTC authorized only through December 31, 2014

The Tax Increase Prevention Act of 2014 authorized the WOTC credit only through December 31, 2014.

September 2015: House of Commons voted to decrease Tax Credit thresholds

In September 2015, the House of Commons voted to decrease Tax Credit thresholds, with opponents claiming it would harm those on low incomes.

October 2015: House of Lords supported a motion delaying tax credit cuts

In October 2015, the House of Lords supported a motion from Baroness Meacher delaying the imposition of tax credit cuts until a new consideration of the effects could be made by the House of Commons.

December 2015: ITC for residential solar installations renewed

In December 2015, the ITC for residential solar installations was renewed. The ITC for other technologies was extended by one year.

2015: Congress modified and extended the WOTC

In 2015, Congress modified and extended the WOTC through the Protecting Americans from Tax Hikes Act (the PATH Act).

2015: Oregon RETC gave $12.2 million in tax credits

In 2015, Oregon's RETC gave $12.2 million in tax credits.

2015: Congress voted to extend the PTC for wind and solar power

In late 2015, Congress voted to extend the PTC for wind and solar power for 5 years and $25 billion.

April 2016: Tax Credit threshold decrease comes into effect

In April 2016, the law to decrease Tax Credit thresholds came into effect. This change was previously voted on by the House of Commons in September 2015.