Refundable Tax Credit
Also called: refundable credit, non-refundable credit
A refundable tax credit can take your tax below zero and pay you the difference; a non-refundable one can only reduce tax to zero. The distinction decides whether a credit reaches households with little tax liability, which is usually the ones policy is aimed at. The Earned Income Tax Credit is fully refundable and is the largest anti-poverty transfer in the US delivered through the tax code.