Which tax credits are refundable?

Why this matters

• A refundable credit is the only kind that can produce an overpayment when your tax is already zero.
• Every one of them has its own eligibility rules, and every one of them has conditions that end it.

The main ones, by statute

• Earned income credit — its own rules on earned income, investment income, residency, and qualifying children.
• Child tax credit — part of it can be refundable under the additional child tax credit rules.
• American opportunity credit — a portion of it is refundable; the lifetime learning credit is not.
• Premium tax credit — reconciled on the return against what was paid in advance to your insurer.

The honest part

• Qualifying for one of these is a facts question, not a name question.
• Software cannot tell you that you qualify. It can tell you which facts decide it.

What it turns on

• your earned income and your adjusted gross income for the year
• your filing status
• whether anyone is a qualifying child or qualifying relative, and their Social Security number status
• your investment income for the year
• for education credits: Form 1098-T and what was actually paid
• for the premium tax credit: Form 1095-A

What would make it not apply

• you do not meet that specific credit's eligibility rules
• your income is above that credit's phase-out for your filing status
• a required identification number is missing or issued after the deadline the statute sets
• you are claimed as a dependent on someone else's return and that credit does not allow it
• you do not file a return

The law, quoted

Sources: IRC §32 · IRC §24 · IRC §25A · IRC §36B · Pub 596 · Pub 970 · Pub 974. Each passage below is copied from the document VALID fetched, with the start of its SHA-256 fingerprint.

Rule 7—You Must Have Earned Income This credit is called the “earned income” credit because, to qualify, you must work and have earned income. If you are married and file a joint return, you meet this rule if at least one spouse works and has earned income. If you are an employee, earned income includes all the taxable income you get from your employer. Rule 15 has information that will help you figure the amount of your earned income. If you are self-employed or a statutory employee, you will figure your earned income on EIC Worksheet B in the Form 1040 instructions.

Pub 596 — Rule 7—You Must Have Earned Income · fingerprint 61d265e664c7

Table 1. Earned Income Credit in a Nutshell First, you must meet all the rules in this column. Second, you must meet all the rules in one of these columns, whichever applies. Third, you must meet the rule in this column. Chapter 1. Rules for Everyone Chapter 2. Rules if You Have a Qualifying Child Chapter 3. Rules if You Do Not Have a Qualifying Child Chapter 4.

Pub 596 — Table 1. Earned Income Credit in a Nutshell · fingerprint 61d265e664c7