Refundable Credit

Refundable Credit

A direct, dollar-for-dollar reduction of one's tax liability in which one still receives a tax refund even if one's liability drops below zero. That is, if a taxpayer otherwise owes $2,000 to the government, but takes $3,000 in refundable credits, then the government owes $1,000 to the taxpayer. Relatively few tax credits are refundable; most are limited to the amount of one's tax liability. However, the earned income tax credit is a common example of a refundable credit.

Refundable Credit

A credit for which the IRS will send the taxpayer a refund for any amount in excess of the taxpayer's tax liability.
References in periodicals archive ?
In 2013 the Louisiana legislature-at the request of the governor's office-first severely curtailed the R&D tax credit and in 2015 ended the refundable credit.
36B refundable credit for coverage under a qualified health plan.
Skate rentals, $3 with $25 refundable credit card or cash deposit required per skate rental.
30, the IRS announced that refundable credit payments processed on or after Oct.
One leading reform option is to replace non-refundable credits, which count only against the earned annual income that most postsecondary students lack, with a refundable credit that students qualify for, regardless of annual income.
If the amount of advance credit payments you get for the year is less than the tax credit you're due, you'll get the difference as a refundable credit when you file your federal income tax return.
The refundable credit is paid to the insurer to help fund the purchase of certain health insurance plans.
Another option is to make the CFTC and similar provincial credits a refundable credit similar to the Children's Activity Tax Credit (CATC) in Ontario and the Active Families Benefit in Saskatchewan.
Families who adopted from 2005 to 2009 may be able to benefit from the refundable credit, because credits from those years can be carried forward until 2010.
For example, since 2009, the American Opportunity Tax Credit, a partially refundable credit of up to $2,500 a year for four years of college, has helped cover the cost of tuition and other education-related expenses.
Child tax credit: Extends through 2012 the maximum child tax credit of $1,000 as well as provisions that expand eligibility for the refundable credit.