# Refundable Tax Credit

*Taxes — Finicade finance glossary*

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.

**Also known as:** refundable credit, non-refundable credit

**Related terms:** [Tax Credit](https://finicade.com/glossary/tax-credit), [Earned Income Tax Credit](https://finicade.com/glossary/earned-income-tax-credit), [Child Tax Credit](https://finicade.com/glossary/child-tax-credit), [Tax Refund](https://finicade.com/glossary/tax-refund), [Taxable Income](https://finicade.com/glossary/taxable-income)

Source: https://finicade.com/glossary/refundable-tax-credit