11/19/2024
Tax Tip Tuesday …. Refundable Tax Credit VS Nonrefundable Tax Credit 💫
A refundable tax credit allows you to reduce your tax liability to zero and potentially receive the excess amount as a refund.
Example : If you owe $500 in taxes but qualify for a $1,000 refundable credit, your tax liability would be wiped out, and you could receive the $500 difference as a refund.
A non-refundable tax credit can reduce your tax liability to zero, but any excess amount beyond what you owe is not refunded to you.
Example: If you owe $500 in taxes but qualify for a $1,000 non-refundable credit, the credit will reduce your tax bill to zero, but you won't receive any money back beyond that.
