Refundable Credits

Definition:  Credits that can be applied to your tax owed or, if no tax liabilty exists, can be fully refunded.

This means that if you owe very little or no tax and are entitled to a refundable credit you can actually get back more than you paid in.

There are only two REFUNDABLE CREDITS as of 2005.

The Earned Income Credit (Sometimes called the Earned income tax credit) and the Additional Child Tax Credit.