Types of Federal Tax Credits
November 30th, 2008 by admin
There are essentially two types of federal tax credits. The first type of federal tax credit is refundable whereas the second type is nonrefundable.
Like the name suggests, refundable tax credits are what most people want. This is because even if you do not have any tax liabilities, you can still get your tax credit whereas the nonrefundable tax credits, you cannot.
The nonrefundable tax credit is a little better than tax deductions but it is still not as desirable as the refundable tax credits. Study the different types of tax credits before you claim anything from the IRS to avoid problems.