Because the nonrefundable credit reduces income tax liability but cannot generate a refund to the taxpayer, the credit is not considered gross income for purposes of Internal Revenue Code Section 61. In other words, a taxpayer that claims a nonrefundable credit for donations to school tuition organizations is not required to include the credit in gross income for federal and state tax purposes. However, rebates issued for donations to school tuition organizations prior to the enactment of Act 377 are considered a state subsidy to the taxpayer and are taxable as income for federal and state tax purposes.