Meaning of tax credit

English Language Proficiency Tests, Advanced Level

ESL/EFL Test #717 [color=blue]“Recession and Financial Terms (2)”, question 9

In addition to injecting currency into the economy to spur growth, President Obama created a temporary tax for first-time homebuyers. If eligible for one of these, a tax payer can reduce his or her tax liability by a specified amount.

(a) hike
(b) credit
© negotiation
(d) disappearance

English Language Proficiency Tests, Advanced Level

ESL/EFL Test #717 [color=blue]“Recession and Financial Terms (2)”, answer 9

In addition to injecting currency into the economy to spur growth, President Obama created a temporary tax credit for first-time homebuyers. If eligible for one of these, a tax payer can reduce his or her tax liability by a specified amount.

Correct answer: (b) credit

Your answer was: [color=red]incorrect
In addition to injecting currency into the economy to spur growth, President Obama created a temporary tax negotiation for first-time homebuyers. If eligible for one of these, a tax payer can reduce his or her tax liability by a specified amount.
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I think there is an error here

No, tax credit is the right answer. Tax ‘negotiation’ is the wrong answer.