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  • What is a nonrefundable tax credit?

    A nonrefundable tax credit is one of the two types of personal tax credits that individual taxpayers can qualify for. A nonrefundable tax credit means you get a refund only up to the amount you owe. As you can see in the example below, even though the taxpayer has applicable credits of $150, their taxable...

  • What is a refundable tax credit?

    A refundable tax credit is one of the two types of personal tax credits that individual taxpayers can qualify for. A refundable tax credit means that a taxpayer can get a refund, even if it is more than the taxpayers tax liability. As you can see in the example below, the taxpayers tax liability is...

  • What is the adoption credit?

    The adoption credit is a type of nonrefundable tax credit. The adoption credit exists for parents who are adopting a child. Basically, taxpayers can receive a credit for expenses incurred to adopt a child, such as legal fees, court fees, travel fees, etc. However, medical expenses incurred for adopting a child are not eligible expenses.