What is it, How it Works, Examples, Requirements, Benefits and How to Claim the Credit ?

"Refundable Tax Credit"

Refundable tax credit is a tax benefit that can potentially result in a refund from the government even if the taxpayer has no tax liability. It creates the possibility of a negative tax liability.

What is Refundable Tax Credit ?

A refundable tax credit works by reducing the amount of tax owed by an individual or business and potentially resulting in a cash refund if the credit amount exceeds their tax liability.

How the Refundable Tax Credit Works ?

Examples of refundable tax credits include, Earned Income Tax Credit (EITC), Child Tax Credit (CTC), Savers Credit, American Opportunity Tax Credit (AOTC) and Premium Tax Credit (PTC).

Examples of Refundable Tax Credits

Eligibility for credits depends on the income level, family size, and specific criteria outlined by the tax code, with the aim of assisting low-to-moderate income individuals and families.

Who is Eligible for Refundable Tax Credits ?

Benefits of credits include providing financial support to low-income families, reducing poverty rates & stimulating economic growth by putting money back into the hands of those who need it most.

Benefits of Refundable Tax Credit

How to Claim Refundable Tax Credit ?


To claim a refundable tax credit, you typically need to complete the appropriate tax forms or schedules designated by the tax authorities in your country.