The Difference Between a Refundable Credit and a Nonrefundable Credit

question 71

Multiple Choice

The difference between a refundable credit and a nonrefundable credit is:

• A) A refundable credit can only reduce a taxpayer's tax liability to zero
• B) A nonrefundable credit can only reduce a taxpayer's tax liability to zero
• C) Refundable tax credits are only available to individual taxpayers
• D) Nonrefundable tax credits are only available to corporations