Photo credit: jb

We’re here in the midst of tax season, and some of you may be wondering about tax credits. Some tax credits are more valuable than others, something a lot of folks don’t realize. Most tax credits are not refundable, meaning that if the amount of the credit is more than your tax for the year, the credit is limited only to the amount of your tax.

For example, if you had tax payable of $1,500 and then had a Lifetime Learning Credit, Energy Efficient Home Improvement Credit, and/or Foreign Tax Credit amounting to more than $1,500. Your credits will be limited to $1,500 since that’s your tax payable and the credits are not refundable. Some credits are allowed to carry forward to future years, but that’s a topic for another post.

On the other hand, there are a few credits that are refundable, as listed below.

Five

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