In the given condition, the total tax liability of the person will amount to $10,000, if he or she receives a tax credit of $10,000. Hence, option B holds true.
What is tax liability?
The tax liability refers to the total amount of tax binding upon a person for making an income over a prescribed limit during any given period, which is usually a financial year. The tax liability is subject to certain deductions and credits apart from incomes made.
When a tax credit is received for an amount of $10,000 for a person who will make an income of $200,000 in taxable income, his total tax liability will amount to 5%, i.e., $10,000.
Hence, option A holds true regarding tax liability of the person in the aforementioned conditions.
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