👨🏿🏫 Today’s financial literacy lesson is focused on refundable and non-refundable tax credits. A refundable tax credit is a credit that has the ability to take the tax payer’s liability down below 0 and that amount is refunded in cash to the tax payer.
A non-refundable tax credit can offset a tax payer’s liability owed, but cannot earn them a cash refund.
Example: If a tax payer has a bill of $200 with a $500 refundable credit the tax payer would receive a $300 refund.
Conversely, If a tax payer has a bill of $200 with a $500 non-refundable credit the tax payer would still have no tax liability but ineligible for a tax refund.
Remember, the 2021 Tax Extension Deadline is October 15th, 2022. If you are in the process of getting you’re books in order and need assistance, don’t hesitate to reach out! We are here to help! ❤️🐑