What is a refundable tax credit?

What is a refundable tax credit? I am thinking specifically of Earned income credit to working poor families.

What is a refundable tax credit?

Most credits can reduce your tax liability to zero but no farther, meaning you cannot get back more than you paid in.

A refundable credit can reduce your tax liability to zero then give you additional monies back beyond what you paid into the tax system.

What is a refundable tax credit?

A refundable tax credit is one where you will get money even if your total tax is zero. A non-refundable credit is one where you won%26#039;t get it unless your tax is greater than zero.

What is a refundable tax credit?

yes you are right. a refundable credit can give you extra cash in pocket. a non refundable credit only helps reduce your tax liability.

earned income credit is a refundable credit so is additional child tax credit.

What is a refundable tax credit?

As far as my knowledge goes, a refundable credit is one that can produce a refund when no tax liability is owed. For example, Let%26#039;s say your tax return is getting to the part where you compute your tax liability (before credits and tax payments) and your liability ends up being $1,000. Perhaps your family has $1,001 in federal tax witholding. So the government would owe you a dollar. In addition to that dollar, a REFUNDABLE CREDIT will add to that refund. A non-refundable credit only helps to reduce your liability to the point of zero but will not be given back if it exceeds that point. Hope this helps and good luck!!!