Refundable Credit
Barron's Business Dictionary:
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Refundable Credit
A credit that is paid to a taxpayer even if the amount of the credit exceeds the tax liability (for example, the earned income credit and taxes withheld on wages).
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Refundable Credit
Investopedia Financial Dictionary:
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Refundable Credit
A tax credit that is not limited by the amount of an individual's tax liability. Typically a tax credit only reduces an individual's tax liability to zero. Refundable credits go beyond this and so really can be considered the same as a payment.
Investopedia Says:
In other words, you'll still get the credit even if you don't owe any tax. The earned income credit is a good example of a refundable credit in the United States.
Related Links:
Determine whether your business is eligible to claim a tax credit for establishing a retirement plan. Tax Credit For Plan Expenses Incurred By Small Businesses
Here's another reason to put money toward your retirement nest egg. Saver's Tax Credit: A Retirement Savings Incentive
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Barron's Business Dictionary
Dictionary of Business Terms. Copyright © 2007 by Barron's Educational Series, Inc. All rights reserved.
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