Refundable credits are contrasted with nonrefundable tax credits. The vast majority of tax credits are nonrefundable: meaning that these credits can reduce your federal income tax liability to zero, and any remaining credits won't be refunded to the taxpayer.
Refundable tax credits available to individual taxpayers include:
- the earned income credit,
- the adoption tax credit for the years 2010 and 2011 only,
- a portion of the child tax credit,
- a portion of the American opportunity credit for college expenses,
- the homebuyer credit,
- the making work pay credit,
- credit for excess Social Security withholding, and
- the health coverage credit.