A non-refundable tax credit is a credit that is applied to taxes payable that only reduces a taxpayer’s liability to a minimum of zero. Non-refundable tax credits are generally only valid for the year of reporting and cannot be carried forward or backward to other years.
– A non-refundable tax credit is a type of income tax break that reduces one’s taxable income dollar for dollar.
– A non-refundable tax credit can only reduce taxable income down to zero and will not generate a tax refund in the case that the potential credit exceeds the taxable income.
Examples of Non-refundable Tax Credits
Lifetime learning credit (LLC)
Child and dependent care credit
Foreign tax credit (FTC)
Mortgage interest tax credit
Elderly and disabled credit
Residential energy efficient property credit
General business credit (GBC)
Alternative motor vehicle credit
Non-refundable tax credits, however, can negatively impact low-income taxpayers, as they are often unable to use the entire amount of the credit. CPA Brampton helps you make the right decisions so that you do not end up paying a cent more than you have to when tax season rolls around.
When it comes to dealing with something as personal as your taxes, then you want to make sure you are working with trustworthy individuals.