Income Tax Credits

Tax credits reduce your tax bill and may increase your refund. Tax credits are either refundable or nonrefundable.

• Refundable credits can reduce the tax you owe below zero. If the credit exceeds your tax, you get the difference back in your refund.
• Nonrefundable credits can reduce the tax you owe to zero (not below). If the credit exceeds your tax, you do not get the leftover amount.

You can get a refund for refundable credits even if you do not owe income tax.